Congress’s youngest and possibly most famous new member, Alexandria Ocasio-Cortez has made many lofty proclamations during her time in the lime light, but perhaps the one getting the most attention is her call to raise tax rates to 70% to pay for her agenda.
Rational thinkers can see the issue in taking 70% of another person’s dollar for no other reason than wanting to use it for something else. For the benefit of Congresswoman Cortez and those who believe like she does, the Tax Foundation has done the math to show that even if you confiscate 70% of the income of the wealthiest Americans, the socialist programs they have dreamed up to use that money on are still out of reach. The Wall Street Journal reports on the Tax Foundation work:
A 70% top rate would generate even less revenue if extended to capital gains. Investors only pay when they realize gains by selling assets, and they are especially sensitive to tax rates when deciding whether to sell. High rates can leave money locked into a current asset instead of flowing to the next good idea.
When the Tax Foundation authors considered the effect on behavior and incentives—why bother with that extra investment if most of the money will go to government?—they found that a 70% top rate on all income would lose the government $63.5 billion over 10 years.
Ms. Ocasio-Cortez won’t admit it, but she and her socialist friends will eventually have to go where the real money is: The middle class. That means higher tax rates on even modest wage earners; taxes on retirement savings like 401(k)s or college savings accounts.
Remember this the next time a Democrat or columnist who claims to be conservative says he’ll finance a program by hitting the 1% of earners who already pay more than a third of America’s income taxes. Sooner or later they’re coming after you.
And you can read the entire Tax Foundation research here.
Read more from the Journal here.
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