Congresswoman Ocasio-Cortez suggests taxing the rich at 70%, Latest World News - The New Paper

Congresswoman Ocasio-Cortez suggests taxing the rich at 70%

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WASHINGTON Ms Alexandria Ocasio-Cortez began her term as the youngest woman ever elected to the US Congress with a bang this week by proposing to tax the ultra-rich at 60 per cent or 70 per cent.

The daughter of hardscrabble working-class parents, the 29-year-old New Yorker was working toward making good on a campaign promise.

"People are going to have to pay their fair share of taxes," she told CBS television's 60 Minutes, in excerpts released ahead of its broadcast.

The proposal is part of an ambitious tax plan dubbed the Green New Deal that aims to eliminate carbon emissions by 2030.

"It's going to require a lot of rapid change that we don't even conceive as possible right now. What is the problem with trying to push our technological capacities to the furthest extent possible?" she asked.

To pay for the plan, Ms Ocasio-Cortez floated the idea of tax rates as high as 70 per cent on the ultra-rich.

She referred to the progressive taxation system that was in place in the 1960s before Ronald Reagan took office as president when the top earners paid 70 per cent in taxes. That rate then gradually dropped.

The top marginal tax rate is now 37 per cent, following US President Donald Trump's fiscal reforms. It was previously at 39.6 per cent.

Even though it has little chance of success, the proposal backed by the young lawmaker has already garnered significant support.

It landed her on the front page of the New York Daily News, an image of which Ms Ocasio-Cortez was quick to retweet.

A Washington Post analysis found that if the approximately 16,000 Americans who earn more than US$10 million each paid 70 per cent income taxes for any revenue above that marker, the federal government would rake in around US$72 billion a year.

But the sum would likely be much lower because individuals in that bracket would find ways to avoid the heavy tax burden.

In a New York Times op-ed, Nobel Prize-winning economist Paul Krugman backed Ms Ocasio-Cortez, rejecting "the constant effort to portray her as flaky and ignorant".

"On the tax issue, she's just saying what good economists say," he added.

With her past as a New York bartender, Ms Ocasio-Cortez is a figurehead of the new wave of young lawmakers who entered Congress after the midterm elections, bringing fresh perspectives and more diversity to the legislature. - AFP