Wednesday, January 23, 2019
Following up on Sunday's post, Alexandria Ocasio-Cortez's Proposed 70% Top Tax Rate: New York Times op-ed: Alexandria Ocasio-Cortez’s Tax Hike Idea Is Not About Soaking the Rich—It’s About Curtailing Inequality and Saving Democracy, by Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley):
Alexandria Ocasio-Cortez has kick-started a much-needed debate about taxes. But the debate, so far, has been misplaced. It’s obvious that the affluent — who’ve seen their earnings boom since 1980 while their taxes fell — can contribute more to the public coffers. And given the revenue needs of the country, it is necessary.
But that’s not the fundamental reason higher top marginal income tax rates are desirable. Their root justification is not about collecting revenue. It is about regulating inequality and the market economy. It is also about safeguarding democracy against oligarchy. ...
Just as the point of taxing carbon is not to raise revenue but to reduce carbon emissions, high tax rates for sky-high incomes do not aim at funding Medicare for All. They aim at preventing an oligarchic drift that, if left unaddressed, will continue undermining the social compact and risk killing democracy.
Progressive income taxation cannot solve all our injustices. But if history is any guide, it can help stir the country in the right direction, closer to Japan and farther from Putin’s Russia. Democracy or plutocracy: That is, fundamentally, what top tax rates are about.