June 26, 2019

On Taxes, Ocasio-Cortez Has the Right Idea

“Freshman Rep. Alexandria Ocasio-Cortez’s comments about a 70 percent tax rate on the wealthy set off a controversy over who does and doesn’t understand how America’s tax system works. What has been lost in the dust-up is that the wealthy pay relatively little in taxes compared with their peers in other developed countries, and the congresswoman is correct that they will need to pay more if we are going to continue to provide the quality public services, infrastructure, health care and economic equity all Americans truly deserve.

The signature achievement of the last Congress and the Trump administration, the Tax Cuts and Jobs Act, took us in exactly the wrong direction. It radically reduced taxes for the wealthy and corporations, at a cost of $1.9 trillion over 10 years. And the new law provides only marginal or no benefits for average Americans and households of color in particular.

A recent report by my group Prosperity Now found that $200 billion in benefits from the new law, out of a total of $275 billion, goes to the top 20 percent of households. Furthermore, white households will receive $2,020 on average in benefits compared with $970 and $840 for Latino and black households respectively. Regardless of race, even solidly middle-class households (earning between $40,000 and $110,000) received relatively little — an average of $2.75 a day compared with the top 1 percent of earners, who get $131 a day.”

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