Democratic Rep. Alexandria Ocasio-Cortez of New York used the occasion of the Super Bowl on Sunday to make a further push for raising taxes on the wealthiest Americans to 70 percent, arguing a benefit would be the “owners who refuse to hire (Colin) Kaepernick would” be subject to the new rate.
The congresswoman’s renewed call for higher taxes came in response to fellow freshman GOP Rep. Dan Crenshaw’s of Texas wry tweet after Super Bowl LIII, “Should someone propose a 70% tax on the Patriots so that NFL competition is more fair and equal? Asking for a friend.”
Ocasio-Cortez answered, “The average NFL salary is $2.1 million, so most players would never experience a 70% rate. The owners who refuse to hire Kaepernick would, though.”
The average NFL salary is $2.1 million, so most players would never experience a 70% rate.
The owners who refuse to hire Kaepernick would, though. https://t.co/AnST2lCiU9
— Alexandria Ocasio-Cortez (@AOC) February 4, 2019
Former San Francisco 49ers quarterback Colin Kaepernick filed a grievance against the National Football League in the fall of 2017, alleging its owners were colluding to keep him from being able to play, due to his national anthem protests.
Kaepernick became a free agent after his contract with the 49ers ended in 2017, and he has not been picked up by another team, The New York Times reported.
In an interview on CBS News’ “60 Minutes” in early January, Ocasio-Cortez called for raising the top marginal income tax rate on the wealthiest Americans to 70 percent, a level not seen since the early 1980s.
“You look at our tax rates back in the ’60s and when you have a progressive tax rate system, your tax rate, let’s say from zero to $75,000, may be 10 percent or 15 percent, etc,” Ocasio-Cortez said.
“But once you get to the tippy-tops — on your 10 millionth dollar — sometimes you see tax rates as high as 60 or 70 percent,” she continued. “That doesn’t mean all $10 million are taxed at an extremely high rate, but it means that as you climb up this ladder, you should be contributing more.”
What the lawmaker described is how the current U.S. tax system works, with the present top rate at 37 percent, down from 39.6 percent, following the Republican tax reform law of 2017.
Those earning under $12,200 owe no federal income tax due to the standard deduction, which doubled under the GOP tax law to help those at the lowest end of the wage scale.
The tax brackets work their way up, according to the Tax Foundation, starting with 10 percent for those with incomes above the standard deduction. Earners at the top — $510,300 or more — pay 37 cents of every dollar in income to the federal government.
Critics of Ocasio-Cortez’s plan, like former Reagan administration economist Art Laffer and Heritage Foundation economist Stephen Moore, the authors of “Trumponomics,” argue that steep taxation of the wealthiest Americans will hurt the economy and in the end result in them paying less of a percentage of total tax revenues received.
They explain that taxing the wealthy at high rates — like 70 percent, which would be the highest in the industrialized world — with the intent of bringing in more revenue into the U.S. Treasury assumes that the job creators will continue to work as hard, as well as invest, risk, and innovate, even though the federal government is taking $7 out of every $10 they earn versus the current less than $4.
Laffer told Fox News last week, “What we do know is that every time tax rates have been raised substantially on the rich, not only have we gotten less tax revenues from the rich, but we’ve also caused a recession or decline as a result as well.”
When taxes have been cut on the rich, during the Warren Harding and Calvin Collidge presidencies of the 1920s, the Kennedy administration of the early 1960s or the Reagan years of the 1980s, he said, “the rich have paid a lot more in taxes.”
A reason is because the wealthy had an incentive and the additional cash to grow their businesses, which created new wealth and jobs.
“You can’t love jobs and hate job creators,” Laffer stated.
In a commentary piece published by CBN last month, Moore recounted that Democrats like Ocasio-Cortez, Sen. Elizabeth Warren of Massachusetts and Rep. Julian Castro of Texas calling for double the tax rates on the wealthiest Americans and more have fallen a long way from the 1980s, when the Democratic Party supported the bi-partisan Tax Reform Act of 1986 under President Ronald Reagan.
They have failed to learn the lessons of the past, he wrote.
“Mr. Castro seems to long for the return to 90% tax rates,” Moore observed. “Does he know any of the history here? It was President John F. Kennedy who called for a 30% across the board reduction in tax rates that ended the tyranny of a government that could take 90 cents in taxes out of a dollar of earnings. JFK argued correctly that the lower tax rates would ‘raise revenues in the long run.'”
Moore noted that Reagan picked up where Kennedy left off, taking the top marginal rate down from 70 percent to 28 percent.
“Federal tax receipts even with these lower tax rates doubled from $500 billion in 1980 to just over $1 trillion by 1990 (or roughly 50% higher after accounting for inflation),” Moore wrote.
The size of the economy grew by one-third in the 1980s under Reagan’s policies, according to Peter Ferrera of the conservative think tank the Heartland Insitute.
More than 16 million jobs were added during Reagan’s two terms in office, according to conservative columnist Kyle Smith, writing in a 2014 Forbes piece. That’s an average of 2 million per year.
By way of comparison, former President Barack Obama raised the taxes on the wealthiest Americans from 35 percent to 39.6 percent, and saw 11.6 million jobs created during his time in office, or about 1.45 million per year.
The more anemic job growth is noteworthy, particularly given the country’s population was approximately 80 million higher when Obama held office than it was in the Reagan years.
Over 5 million jobs have been created since Trump was elected president on the promise of cutting taxes and government regulations.
Moore contended that modern Democrats appear to be more driven by ideology than what history has shown to be true.
He explained that in 1980, with a 70 percent top rate, the top 1 percent paid 20 percent of income tax revenues versus 2016, when at a rate of 39.6 percent, they paid 40 percent of the total revenues received, according to the Tax Foundation.
In other words, whatever the “fair share” Ocasio-Cortez and other Democrats are saying the richest Americans are not paying now, they were paying less at a top marginal rate of 70 percent, because they had less ability and incentive to create wealth and jobs.
“I suspect the left’s obsession with raising tax rates is not about helping the poor or middle class or about lowering the budget deficit, but about tearing down the rich,” Moore concluded.
“The modern left is not driven by fairness. It is guided by an ideology of greed and envy. Those are vices, not virtues.”
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