Alexandria Ocasio-Cortez

Alexandria Ocasio-Cortez Wants to Raise Your Taxes

Do you pay enough taxes? What is enough?

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Do you pay enough taxes? What is enough?

When asked on 60 Minutes, Rep. Alexandria Ocasio-Cortez didn't seem to have a specific tax rate in mind, but then she said, "back in the '60s…you see tax rates as high as 60 or 70 percent."

Suddenly, 70 percent tax rates are a progressive plan, although Rep. Ilhan Omar added, "We've had it as high as 90 percent."

She's right.

That was the top tax rate when I was a kid, and today, many Democrats say if we'd just raise rates on rich people, government would have plenty of money to pay for our wonderful programs.

But it's a myth. What progressives don't say, perhaps because they don't know it, is what economic historian Dr. Phillip Magness explains in my new video: "No one actually paid anywhere close to those rates."

For more than a decade, Magness has researched old taxes.

He discovered that America's 90 percent tax bracket didn't bring in much extra money. That's because rich people found loopholes.

Then, because of that, and because the high tax rates discouraged work, President Kennedy backed a bill that lowered the top rate to 70 percent.

But it turned out that the 70 percent rate wasn't very real either.

"A millionaire on average would pay 41 percent," says Magness, because of "all these deductions and exemptions and carve-outs that are intentionally baked into the tax code."

If you look at newspapers of that time, you see ads promoting things like free $2,499 ocean cruises.

"(B)asically take a vacation around the Caribbean," explains Magness, "but while you're onboard the ship you attend, say, an investing seminar or a real estate seminar, and then write off the trip."

Some rich people bought musical instruments for their kids and deducted the cost because, say, a clarinet would supposedly provide "therapeutic treatment."

Instead of investing in ideas that might create real wealth, rich people hired accountants to study the tax code.

"Who can afford the best accountants? It's always the wealthy," says Magness.

Today, our top tax rate is 37 percent. A dozen years after President Kennedy's tax cuts, Ronald Reagan proposed reducing the 70 percent rate, saying, "Our tax system could only be described as un-American."

"Democrats actually agree with him," recounts Magness. "Reagan goes to the table and says, 'Let's make a deal…cut the rates…and in exchange, we'll consolidate the tax code."

They did.

Surprise—the lower rates brought in just as much money.

It turns out that tax revenue as a percentage of gross domestic product stays about the same no matter what the top bracket is. Higher tax rates don't necessarily get rich people to pay more taxes.

"They'll change where they earn their income," economist Art Laffer told me about what he'd once said to President Reagan. "They'll change how they earn their income. They'll change how much they earn, when they receive the income. They'll change all of those things to minimize taxes."

President Trump, who in some years paid zero income tax, understands that. Before he became president, I asked him about a proposed tax hike. "Look, the rich people are going to leave—and other people are going to leave!" he told me. "You are going to end up with lots of people that don't produce. And then, that's the spiral. That's the end."

That happened in Europe, recounts Magness: "France attempted a massive tax on its wealthiest earners…the business people left in a mass exodus from the country."

But today's progressives are selective when they look at history. On TV, Ocasio-Cortez said, "Under Republican administration…Dwight Eisenhower, we had 90 percent marginal tax rate."

I asked Magness what would happen if the U.S. were to return to those rates—while also eliminating the deductions that came with them.

"You're asking for an economic disaster," he answered. "I ask the question: Do we leave (wealth) in the private sector where the market decides? Or do we subject it to corrupt politicians?"

Please, let's leave most of America's wealth in private hands.

COPYRIGHT 2019 BY JFS PRODUCTIONS INC.
DISTRIBUTED BY CREATORS.COM

NEXT: Reforming Democracy

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  1. A mathematician, a statistician, and an economist are the final three candidates for a job prospect.

    The interviewer asks each in turn “What’s 2 + 2?”

    The mathematician answers without hesitation “4.”
    “Always?” asks the interviewer.
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    The statistician answers after a brief pause “4.”
    “Always?” asks the interviewer.
    “Well, plus or minus 1” replies the statistician.

    The economist, upon hearing the question, immediately springs up and scurries around the room, dimming lights and shuttering blinds, before leaning in and whispering in a conspiratorial tone “What do you want it to be?”

    1. Hehe. That’s one I hadn’t heard.

      1. Old as the hills. And apparently well known by Manafort’s tax accountant.

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    4. That is hilarious.
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  2. Well whatever the case fortunately for the rich the tax rates haven’t gotten in their way of amassing all the fucking money.

    1. All the money? Because I got some money in my wallet and I’m not rich. Probably won’t ever be rich, either, because I tend to spend my money like just about everybody else instead of saving it and investing it – i.e., turning money into capital. See, the problem with these socialist’s idea about seizing the wealth is that basically it’s a recipe for killing the goose that lays the golden eggs and serving it up with a side of seed corn. There’s not a fixed amount of wealth in the world, you can increase it by watching the wealthy and imitating their behavior rather than envying them and advocating stealing all their shit and then justifying it by claiming that, since the only way you can imagine making money is by stealing it, those who have money must have stolen it, too. No, you make money by figuring out how to make yourself useful to other people, and nobody has much use for stupid, greedy, evil people like these socialists.

      1. The rich globalists need underpaid, quietly ignorant workers. Socialism gives them that. That is why you have the ultra rich like Soros, Styer, Gates, Buffet, Bezos and others promoting Socialism.

        1. I think that for half of those people, it’s “wealth guilt” that causes them to say such stupid things.

      2. Well said, Jerryskids.

    2. Except wealth is constantly being created from nothing. The 78 billion dollars in wealth Bill Gates owns didn’t exist before he created it.

      1. No, the wealth that exists today was always in the world, just waiting for some orange oligarch like Trump to exploit it!!!!!!1!!

    3. Envy is not pretty. Would your life be better if all the money the “rich” had just disappeared?

  3. France attempted a wealth tax and the rich abandoned their country

    1. Or they could stick around suffer for a few decades and show us how much the tax rate hurts by kneeling during the anthem.

      1. Thanks, Louis. Short but pointless.

  4. John Stossel would be the world’s best libertarian pundit if this were Idiocracy. And it almost is!

    1. This is true but not for the reasons you think.

      1. Too many Trumps breeding?

        1. no, more like too many AOC’s…John Silber is currently providing ventilation for an entire cemetary.

    2. Is this Tony the childlike troll?

      1. How kind of you to say. I’ve been told I am baby-faced, but it’s been a while.

        1. No he meant your tiny deformed genitals hon. We’ve talked about this.

          1. Despite this I’m guessing even Wesley Pipes or Mandingo would get lost in there without a flashlight.

  5. The road to prosperity is paved with MOAR TAXEZ!

  6. Ocasio-Cortez is starting to hint at the Progressive plan to bring us back to the 1970’s. This might be the result of representing a district full of families who decided in the 1970’s that things in the city were going great until Mayor Koch took over.

    1. Stagflation, FTW!!!

    2. Her district is now populated with the under -educated and dangerously ignorant. A perfect Democrat district.

    3. Arguing with AOC is like arguing with a college freshman who just took his first class on Marx. She’s a dolt.

    4. Conservatives pine for the 1950s. Progressives pine for the1970s.

      1. One view; mine is conservatives pine for individual freedom, progressives pine for control of individuals.
        We are both oversimplifying and overthinking this whole thing.
        The old labels don’t work anymore. I try to stick to freedom .vs slavery. Who advocates for policies that increase which one?

      2. “Conservatives pine for the 1950s. Progressives pine for the1970s.”

        No, no. Progressives pine for the 1950s too, but in the Soviet Union.

  7. why in god’s name does any one pay any attention to what the dimwit AOC says or thinks…wait just use the said portion, cause I’m pretty sure thinking is not involved…

    1. I wonder the same thing every day. As Jason Stapleton said, “I’m surprised she can tie her own shoes”.

      1. Has anybody actually seen her tie her own shoes?

        1. Lots of shoes women wear are SLIP ONS! She probably can’t tie them. It’s probably either slip ons, somebody ties them for her, or maybe some of those sweet ones with velcro!

          1. He clearly meant “hook and loop fasteners”.

            1. Yep. Don’t wanna get sued.

    2. Every time she speaks, another Democrat questions their political ideology. We should be celebrating AOC as much as possible.

      1. Yes let her speak on and on…

  8. Occasional-Cortex ls living up to her sobriquet.

    1. I am beginning to believe it is something less than occasional.

      1. The visible results of degrees from Boston College – – – – – – – –

    2. Sandy can match Donnie crazy for crazy. Abetted by Liz Warren, the bigot from MN and a handful of other nincompoops, America will be safe for another Triumphant four years.

      1. Until AOC becomes Prez in 2024. God save us all.

  9. I will legit leave this fucking country if they pass taxes that high, even if I’m not in that bracket. The hell storm that will follow will destroy the nation, so better to not be around to deal with the shit show.

    1. I’m too old to move. If I were still 20, I would move right now and beat the rush.

      But as bad as this country is getting, others are have recently have been much worse. Canada isn’t too bad, but Canada is perpetually just one election away from full on Socialism. Most of Europe is an economic basket case. And despite Scandanavian countries steadily moving away from Socialist ideals, they are still solidly in favor of cradle-to-grave welfare state and higher taxes.

      The main problem in the US is that most of our taxes are hidden. So calls for 90% tax rate don’t immediately trigger revolts. Back when our highest marginal tax rate was indeed 90%, NO ONE PAID IT! One doesn’t need to have a college degree in Arithmetic to do the math. At that rate the rich will find a way to shelter their money, leaving the poor and middle class to fund OCAs schemes. The rich don’t care about the income tax because the rich dont’t have a flipping income! Okay, some professionals do have an income, but the ultra-wealthy do not. They have investments and assets. And you sure as hell can’t tax net worth. What are you going to do, liquidate them off? Who the hell is going to buy the asset when it’s taxed at 90% of value?

      1. People will at the same time call “the rich” clever enough to get rich to begin with while simultaneously thinking they are incapable of finding some way to avoid giving most of it to the government.

      2. Actually, taxing net worth WAS discussed. Don’t remind anyone.

        1. Yeah, Warren would take 2 percent of your wealth every year if you’re in the tippy top, so you’re flat broke in 50 years.

    2. This Socialist BS is coming to a head.

      If we are not rolling this nonsense back, then lets just end the Great Experiment and find out for sure how many guns Americans have.

  10. It will be fun to watch from the sidelines as progressive pucker their a$$es to explain why the economy is in the tank and unemployment is on the rise.

    1. Same as the last time. They’ll just blame it on Bush.

      1. They’ll blame the residual austerity from 4.75 trillion dollar budgets.

  11. Look. The rich aren’t paying their fair share. How do we know this? They’re rich! If they paid their fair share then they wouldn’t be rich anymore! Duh!

  12. It wasn’t just rich people that used those deductions–the middle class took advantage of them, too. It’s a big reason why tax time during the 50s and 60s was so stressful and people were judicious about keeping receipts to track their spending.

  13. The top 5% control about 60% of total wealth in the US. So if the government entirely confiscated all of that wealth (which you can only do once) and somehow managed to turn it into liquid assets (which you couldn’t do without destroying a lot of that wealth), it might, *might* be enough to pay the upfront costs of the GND. That’s assuming that everything doesn’t just burn to the ground in the process.

    The simple truth is that there aren’t enough rich people to pay for all the stuff that the socialist wing of the Democratic party wants to do.

    1. Who’s going to buy those liquid assets? The poor? The middle class? Sure you confiscate the fancy ass mansion from the fancy ass rich dude, but who you gonna sell it to except some other rich dude?

      Besides, most wealth in this country is in the form of investments. No way in fucking hell do you want to be taxing investments at 90%. Maybe you can give away their mansions to congressmen as their private dachas, but what about their factories? Who the fuck is going to invest in factory that’s taxed at a 90% rate?

      1. The socialists aren’t going to sell that mansion, they are going to move in to it.
        Without inviting 150 homeless to enjoy it with them.
        The point of the “wealth tax” is not to raise revenue, but to destroy individual businesses by forcing them to sell the business to pay the taxes. Then they can be more easily controlled.

      2. Exactly – that’s what I meant by “you couldn’t [liquify those assets] without destroying a lot of that wealth”.

        I honestly doubt that very many in this socialist wing understand that.

        Also, the total adjusted gross income of the top 5% was about $3 trillion (this was back in 2015). The federal budget back in 2015 was $3.8 trillion. So even if you taxed the income of the top 5% at a full (not marginal) 90% rate (and actually managed to collect it all), you’d still only cover 70% of the federal budget. At that was in 2015 – the socialist wing wants to spend even more.

        It simply can’t be done by taxing only the rich. That’s their dirty little secret – they would *have* to raise taxes on the middle class.

      3. Socialists don’t understand the difference between money and wealth. So they figure “Oh this person is worth a million dollars? Let’s take a million dollars from them!”

        1. I believe that the average person (whether in Congress or not) knows the difference between money and wealth?or debt and deficit.

        2. No, they only want to take 700K.

      4. No way in fucking hell do you want to be taxing investments at 90%.

        You don’t understand. The government would take over all the investments because bureaucrats know much better than private citizens what should be done with them. No more fees and commissions would need to be paid to stock brokers or fund managers, so all that money could be taken in by the government to pay for parks and unicorn corrals.

        1. I was saying that would be a unique way to nationalize businesses. Stick the wealthy with a massive wealth tax, well most of their wealth is in their stock portfolio, so the government just takes the stock, and now has a controlling interest in just about every major public corporation and BOOM, all industries are nationalized

    2. Actually, its not enough to pay the upfront costs of the GND

      From the Q4 2018 Z1 balance sheet report for households and non-profits the total net worth of all us households is 104 Trillion.

      See fed reserve website and look up B.1 balance sheet in the Z1 report. I don’t have time to do a tiny url.

      Lets say your 5% statistic is actually true – i have no idea and won’t be spending any time to find out.

      Then that means that the top 5% only have approx 60 trillion in net worth. From what i have read, the GND is closer to 100 trillion neighborhood.

      1. The estimate I saw ranged from $30-90 trillion. Over $100 trillion would not at all surprise me, but I figured I’d be generous and at least give them an outside change of staying under $60 trillion.

        1. The cost for the GND is both infinite and not as much as guesstimated. If it were enacted the country would collapse in the attempt to change everything and then be renamed Starnesville in about 20 years. End of story.

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  15. This warrants a headline?

    Dog bites man, Pacific ocean is damp, etc.

  16. I believe taxes on everyone, not just “the rich”, would need to at least double to approach European levels of taxation, which is the dirty little secret the socialist-leaning factions of Democrats won’t mention.

    1. not really, if you include SS taxes, sales taxes, local taxes, property taxes, excise taxes, etc. We’re already paying a lot.

  17. And yet these same people on the coasts are bitching about their tax bills possibly being higher this year after the reduction of the SALT deduction, etc. All while being in the top 20% of income in the country.

    I guess it’s just other people that should pay their “fair share”.

    1. All laws must benefit everyone in general, and no one in particular. Right now, the wealthy not only pay the highest taxes because they have greater income, they are also paying a higher rate. Make that rate the same for everyone, and make it as high as you like, and you’ll see change, and quickly.

  18. Actually, they did pay higher taxes! The richest people paid and cajoled representatives well to change the tax rates on the richest! Those who made more money, did pay more. But, the representatives in congress changed the rules with limitations, adjustments, exclusions, exceptions and a whole host of fixes to limit taxation on those who could hire tax accountants and lawyers!

    1. Look closely at your standard Form 1040! Can you deduct depreciation, amortization and taxes paid for purchases? No! Look at the exceptions and exclusions above the Adjusted Gross Income. Then look at the P&L of the company you work for and see the differences!

    2. The uber-rich does NOT pay equitably or proportionally into the Social Security. That is a bald face lie when you look at just how the neuvo-rich have manipulated previous Congress’s to write specific tax laws to keep from paying more into the fund! Ask yourselves why millionaires are not taxed on every cent they earn from every source? Further, any increases in their expenses is passed on to the customer!
      To begin with the super rich top 1% has the Tax Code on their side when they do their taxes! Look at the 1040 Long Form and see all the exceptions, exemptions, limitations, exclusions and other limitations before you get to the Gross Income line.(lines 7 through 22)
      Then there are further adjustments benefiting the top 1% before you get to the Adjusted Gross Income line.(Lines 23 through 35)
      The top 1% has tax attorneys and accountants who are well versed on interpreting and recording expenses incurred way before taxation.
      It’s time to level the playing field! It’s time to tax the richest proportionally and equitably at the same over-all rate as the poorest amongst us!

      1. Why should I pay more for the same service?
        constitution… proportioned… yadayada.

  19. High tax talk is always about the rich, high tax rates are about the working class.

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  22. Our taxes would be a lot lower if we didn’t have 100 million blacks and Hispanics to care for.

  23. Should 5 percent appear too small…. be thankful they don’t take it all….

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  26. What is also not taken into account is that the richest among us are also the most mobile and tend to have less allegiance to the country. Force this tax rate upon them and you risk them leaving the country and taking their businesses with them. The same thing happened in the UK when the Labour government raised the tax rate on the rich in the 70s

  27. “Under Republican administration?Dwight Eisenhower, we had 90 percent marginal tax rate.”

    The obvious follow up question that nobody ever asks is who set the tax rate. Obamacare is still the law under the Trump Republican administration. Doesn’t mean Trump supports Obamacare.

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