As Democrats settle into their House majority and start eyeing the White House, they appear to be in competition for proposing the biggest tax hikes. The big question? Will their tax increases actually pay for the programs they’re proposing?
From Sen. Elizabeth Warren’s (D-MA) “Ultra Millionaire Tax” to Julian Castro citing 90 percent tax rates to the new Democratic darling, Rep. Alexandra Ocasio-Cortez’s (D-NY), proposal of 70 percent tax rates for the nation’s top earners, there is one constant: Ensuring the government gets a greater cut from America’s wealthiest is becoming as stylish among Democrats as those pink women’s march hats.
Their goal is the following:
- Fund new programs like Medicare for all;
- Provide free college tuition;
- Close the gap between America’s rich and poor, what Democrats call income inequality.
While the party’s progressive Left supports these plans, others say they wouldn’t work.
Possible independent presidential candidate Howard Schultz called Warran’s plan “ridiculous.” Even The Washington Post editorial board criticized it, and economist Stephen Moore tells CBN News there’s a major problem with Congresswoman Ocasio-Cortez’s high-income taxes.
“So, when Alexandria-Cortez talks about the ‘good ole days’ when it was 70, 80, 90 percent tax rate – guess what, congresswoman? Nobody paid those taxes. Nobody paid 70, 80, 90 percent tax rates because rich people would hire tax accountants who would find ways to help them avoid paying taxes at all,” Moore says.
In 2018, the first year of the Trump tax cuts, the government took in more tax money than ever before.
One reason is many of those loopholes that many wealthy taxpayers used to pay less closed.
Moore fears such a drastic rise in tax rates would kill American competitiveness because the same companies creating the jobs and setting employment records would once again send their business to China.
Plus, Moore thinks taking more than half of what a citizen makes is not only bad for the economy, it’s contrary to the American dream.
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