The Week (US)
A 70 percent tax rate is a liberal fantasy
The Wall Street Journal
If a neurosurgeon who took on extra hours had to give up 70 percent of his additional income to the government, you might think he’d work less, said Holman Jenkins. Democrats, though, seem to think otherwise. Freshman Rep. Alexandria Ocasio-Cortez, beloved by the Left, wants to pay “for a ‘Green
New Deal’ with a 70 percent marginal tax rate on the incomes of top earners.” Left-leaning economists like Paul Krugman—who portrays anyone on the Right as an evil idiot—have leapt to defend the proposal. They’ve cited studies that show “optimal” top tax rates as high as 73 percent or even 84 percent would maximize government revenue. Those stud-
ies, though, talk about a dream world “in which the wealthy have no opportunity to shield or hide their incomes.” Read closely and you’ll find that government revenue starts to fall when the top tax rate hits 48 percent. When you count state taxes, that’s close to what we have now. Even the authors of one study used to justify a huge tax increase call the results “perverse.” Supporters claim a 70 percent tax rate on incomes over $1 million would raise $650 billion every year. That’s nonsense. If it were really possible to “fatten government spending” by that much “without killing the golden goose,” U.S. politicians would have grabbed the chance long ago.