Freshly elected Democratic Congresswoman Alexandria Ocasio-Cortez has made several waves with her recent statements. One of the big ones was when she proposed that the nations wealthiest individuals be taxed at a rate as high as 70%.
While she was correct in stating that tax rates have been that high in the past, it was 70% in the 1970’s, she is delusional in thinking that it could return to that in today’s world.
One HUGE reason is that the public’s faith in the government has dropped almost completely. While 73% of Americans claimed to trust the federal government back in 1958, only a scant 18% shared the sentiment in 2017. Numerous instances of political dysfunction have contributed to this factor like the Vietnam War, Watergate and a widening income gap between classes.
This represents a lack of trust in the government that doesn’t encourage giving the government more money, even if it comes from the rich.
Another huge inhibitor of Ocasio-Cortez’s plan is that the government has simply grown much larger. Government spending in 1960 was 17.2% of the GDP, compared to 2018’s 21% of the GDP. As the public outcry has been for the government to decrease spending, it’s unlikely that they would approve measures that encourage even more spending.
That’s not to say that the tax rate won’t rise again. Trump cut the tax rate from 39.6% down to 37% in a move that many citizens claim only benefits the wealthy elite. The rate could easily be raised back, but not to such an unreasonable level as 70%.