Newly seated Rep. Alexandria Ocasio-Cortez says she is open to returning the top income-tax rate on the wealthiest Americans to the 70% level last seen in the 1960s and 1970s.
In an excerpt of an interview with 60 Minutes scheduled to air on Sunday, Ocasio-Cortez told Anderson Cooper that the Green New Deal she has proposed was “ambitious” and would “require a lot of rapid change that we don’t even conceive of yet.”
When Cooper suggested funding the plan would require raising taxes, Ocasio-Cortez replied, “Yes, there is an element where people will have to start paying their fair share in taxes.” Cooper then asked if she had a specific tax rate in mind, and Ocasio-Cortez said,
“You know if you look at our tax rates back in the 60s and you have a progressive tax rate system, the tax rate from zero to $75,000 may be 10%, 15% etc. But once you get to the tippy-tops on your $10 million, sometimes you see tax rates as high as 60 or 70%. 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.”
According to the IRS, the modern income tax began in 1913, although for three decades, exemptions were high enough that most people didn’t pay much if any income taxes. During World War II, exemptions were cut and the top tax rate rose as high as 94%. During the Korean War, the top tax rate stood at around 91%, then fell to about 70% in the late 60s and 1970s. The tax rate for the lowest bracket during the 70s was 14%.
Starting in the 80s, tax reform brought the top tax rate down to 50% at first, and eventually to 39.6%. Economists caution that oversimplifying maximum tax rates can be misleading because many taxpayers use deductions, exemptions, and other means to lower their actual tax rates.
When Cooper suggested to Ocasio-Cortez that the tax rate she was considering was, by today’s standards, a “radical agenda,” she replied that “it’s only been radicals” like Abraham Lincoln and Franklin Delano Roosevelt who have changed the country.
“If that’s what radical means, then call me a radical,” Ocasio-Cortez said.
