The youngest woman ever elected to the US Congress, Alexandria Ocasio-Cortez, has caused controversy by proposing to tax the income of the ultra-rich at 60%, or even 70%.
“People are going to have to pay their fair share of taxes,” she told CBS television’s 60 Minutes, while referring to the progressive taxation system that was in place in the 1960s before Ronald Reagan took office as president. Top earners at the time paid 70% in taxes, but the marginal tax rate has gradually dropped to 37% today, following President Donald Trump’s fiscal reforms.
Ocasio-Cortez’s proposal is part of an ambitious wider tax plan to finance a ‘Green New Deal’, which aims to eliminate carbon emissions by 2030, France 24 reported.
A Washington Post analysis found that, if the approximately 16,000 Americans who earn more than US$10 million, each paid a 70% rate of tax for any income above that marker, the federal government would rake in around US$72 billion per year - although the sum was likely be much lower in reality as the individuals concerned would find ways to avoid paying it.
According to the Congressional Budget Office (CBO), the top 20% of households paid 88.1% of total federal income taxes and 69.5% of federal taxes in 2015. The top 1% (around 1.2 million households) paid 39.4% of all federal income taxes and 26.2% of federal taxes, at an average total tax rate of 33.3%, the Daily Wire reported.
The CBO concluded that: "The combined effect of means-tested transfers and federal taxes in 2015 was, on average, to increase income at the bottom of the income distribution and decrease income at the top of the distribution".
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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The youngest woman ever elected to the US Congress, Alexandria Ocasio-Cortez, has caused controversy by proposing to tax the income of the ultra-rich at 60%, or even 70%.
“People are going to have to pay their fair share of taxes,” she told CBS television’s 60 Minutes, while referring to the progressive taxation system that was in place in the 1960s before Ronald Reagan took office as president. Top earners at the time paid 70% in taxes, but the marginal tax rate has gradually dropped to 37% today, following President Donald Trump’s fiscal reforms.
Ocasio-Cortez’s proposal is part of an ambitious wider tax plan to finance a ‘Green New Deal’, which aims to eliminate carbon emissions by 2030, France 24 reported.
A Washington Post analysis found that, if the approximately 16,000 Americans who earn more than US$10 million, each paid a 70% rate of tax for any income above that marker, the federal government would rake in around US$72 billion per year - although the sum was likely be much lower in reality as the individuals concerned would find ways to avoid paying it.
According to the Congressional Budget Office (CBO), the top 20% of households paid 88.1% of total federal income taxes and 69.5% of federal taxes in 2015. The top 1% (around 1.2 million households) paid 39.4% of all federal income taxes and 26.2% of federal taxes, at an average total tax rate of 33.3%, the Daily Wire reported.
The CBO concluded that: "The combined effect of means-tested transfers and federal taxes in 2015 was, on average, to increase income at the bottom of the income distribution and decrease income at the top of the distribution".
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
OTHER STORIES THAT MAY INTEREST YOU
Japan raises income tax for high earners
High earners to gain biggest windfall in Australian Budget
France to scrap 30% 'exit tax' on high earners to attract foreign investors
