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70% Tax Rates Won’t Achieve Proponents’ Goals

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Congress’s youngest and possibly most famous new member, Alexandria Ocasio-Cortez has made many lofty proclamations during her time in the lime light, but perhaps the one getting the most attention is her call to raise tax rates to 70% to pay for her agenda.

Rational thinkers can see the issue in taking 70% of another person’s dollar for no other reason than wanting to use it for something else. For the benefit of Congresswoman Cortez and those who believe like she does, the Tax Foundation has done the math to show that even if you confiscate 70% of the income of the wealthiest Americans, the socialist programs they have dreamed up to use that money on are still out of reach. The Wall Street Journal reports on the Tax Foundation work:

A 70% top rate would generate even less revenue if extended to capital gains. Investors only pay when they realize gains by selling assets, and they are especially sensitive to tax rates when deciding whether to sell. High rates can leave money locked into a current asset instead of flowing to the next good idea.

When the Tax Foundation authors considered the effect on behavior and incentives—why bother with that extra investment if most of the money will go to government?—they found that a 70% top rate on all income would lose the government $63.5 billion over 10 years.

Ms. Ocasio-Cortez won’t admit it, but she and her socialist friends will eventually have to go where the real money is: The middle class. That means higher tax rates on even modest wage earners; taxes on retirement savings like 401(k)s or college savings accounts.

Remember this the next time a Democrat or columnist who claims to be conservative says he’ll finance a program by hitting the 1% of earners who already pay more than a third of America’s income taxes. Sooner or later they’re coming after you.

And you can read the entire Tax Foundation research here.

Read more from the Journal here.

Originally posted on Your Survival Guy. 

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.