Cortez marginal tax rate hike

[Draco Dracul]

Well, 70% is a pretty high rate, higher than any other in the world. And some of the scorn AOC's received has been for other factors, such as providing financial security for those unwilling to work.

We've had a 70% rate before. They can afford it.

"They can afford it" doesn't mean that it's right or wise. We can all live in well-insulated tents but most of us would consider that a bit extreme.

You're right. It might lead to such dire consequences as these people only earning 12 million a year and having to take out a loan to buy their seventeenth yacht, USED! =o THE HORRORS!

"They can afford it" doesn't mean that it's right or wise. We can all live in well-insulated tents but most of us would consider that a bit extreme.

How is it wrong or unwise? It would not hurt anyone and help reverse the massive deficit that the republicans have created. Personally as a member of the 38-82 thousand tax bracket, I would not be averse to a bump of that bracket from 22 to 25 percent as it wouldn't meaningfully change my lifestyle while on a country wide level provide significant funding to the government.

Please note because of how taxes work in the US, someone with a net income of $10,000,001 would only pay an additional 33 cents.

[Darth Wedgius]

Well, 70% is a pretty high rate, higher than any other in the world. And some of the scorn AOC's received has been for other factors, such as providing financial security for those unwilling to work.

We've had a 70% rate before. They can afford it.

"They can afford it" doesn't mean that it's right or wise. We can all live in well-insulated tents but most of us would consider that a bit extreme.

You're right. It might lead to such dire consequences as these people only earning 12 million a year and having to take out a loan to buy their seventeenth yacht, USED! =o THE HORRORS!

"They can afford it" doesn't mean that it's right or wise. We can all live in well-insulated tents but most of us would consider that a bit extreme.

How is it wrong or unwise? It would not hurt anyone and help reverse the massive deficit that the republicans have created. Personally as a member of the 38-82 thousand tax bracket, I would not be averse to a bump of that bracket from 22 to 25 percent as it wouldn't meaningfully change my lifestyle while on a country wide level provide significant funding to the government.

Please note because of how taxes work in the US, someone with a net income of $10,000,001 would only pay an additional 33 cents.

That's fine. I'm not saying a 70% marginal rate would be a disaster (I'm not qualified), I'm saying that "AOC wants to raise marginal tax rates for the super-rich and people got outraged" isn't quite the whole story. "AOC wants to raise marginal tax rates for the super-rich a lot and says a lot of other things out of left field and people got outraged" might do a better job explaining that outrage.

[CmdrKing]

Because there is not actually enough money in the target bracket to pay for that. Even assuming they are not going to change how they work so they are not working for free. Which means you have expand the bracket down to people who are not rich, Who at that point will realoze tht working for living is a sucker's bet.

Napkin math time!
Hmm. Circa 500 billion, under the assumption you’re flatly paying out the federal poverty line to people under that line. Estimates purely for the marginal tax rate range around a tenth of that, so certainly on paper it’s unsound.
I mean before costing in savings from other social programs, efficiency, elimination of means testing programs, raised revenue from increased productivity, increased earnings as the job market compensates for increased job mobility due to a sounder safety net...
Oh also money being pretty numbers on paper at the government level because money functions on people’s faith, not intrinsic value...

Also also these are raw, aspirational numbers not yet subjected to tempering by committee, bookkeeping, compromise, and campaigning. Almost as though Ocasio-Cortez is in large part speaking in terms of national goals and resetting the national conversation to be about compassion and creating a livable future rather than treating human suffering as secondary to GDP.

[Mickey_Rat15]

Because there is not actually enough money in the target bracket to pay for that. Even assuming they are not going to change how they work so they are not working for free. Which means you have expand the bracket down to people who are not rich, Who at that point will realoze tht working for living is a sucker's bet.

Napkin math time!
Hmm. Circa 500 billion, under the assumption you’re flatly paying out the federal poverty line to people under that line. Estimates purely for the marginal tax rate range around a tenth of that, so certainly on paper it’s unsound.
I mean before costing in savings from other social programs, efficiency, elimination of means testing programs, raised revenue from increased productivity, increased earnings as the job market compensates for increased job mobility due to a sounder safety net...
Oh also money being pretty numbers on paper at the government level because money functions on people’s faith, not intrinsic value...

Also also these are raw, aspirational numbers not yet subjected to tempering by committee, bookkeeping, compromise, and campaigning. Almost as though Ocasio-Cortez is in large part speaking in terms of national goals and resetting the national conversation to be about compassion and creating a livable future rather than treating human suffering as secondary to GDP.

Or Cortez is an ignoramus in economics who does not grasp how people in the real world respond to incentives at either end and will cause human suffering if her plans are ever implemented. With the road to Hell being paved with good intentions, compassion can cause much misery if uncoupled from humility and competence. Given that she cannot come up with an actual plan to fund this, much less her large grab bag of other wants and the hilariously idiotic FAQ sheet her office put out in support of her Green New Deal resolution, I am going with ignoramus.

[CmdrKing]

Any arguement which starts with “how will the government pay for it” is less informed than Ocasio-Cortez, often willfully so. So let’s focus on the other half of that statement, incentives.

So the napkin math I used up there is based on the 2018 Federal Poverty Line. Y’know what that number is?
12,740.
So that’s not a living wage anywhere. So the incentive for folks to literally just stop working? Negligible.
(I’m sure the number of people who will take that is non-zero. But saying it’s substantial is ludicrous on its face.)

It’s better thought of as expanding and rolling into one program measure like TANF, SNAP, unemployment insurance, and a few others. And in so doing reducing overhead and ensuring benefits are accessible and maintaining benefits is not a substantial time sink.
If we insist on viewing things in economic terms, this is best likened to insurance. It reduces the risks of joblessness, and enables those between jobs to better devote their efforts to finding better employment. It additionally increases job mobility in the same way: an abusive or poorly compensating employer has less hold over their employees if they are more thoroughly insured if they leave. It’s an increase to personal bargaining power.

So there’s not a both ends on the incentives. There’s only the possibility that those paying the taxes will fuck off to elsewhere where they can’t be taxed.
But there’s the rub, y’see. We’re already a service/information based economy. Increasingly everyone has already fucked off, and they’re merely stuck with the tabs for the on the ground workers already here: and they can only be replaced by automation, not in foreign lands. And on that front companies have most of the tools they need now. The minimum human involvement is increasingly being found.
The top end bracket is already doing all the things people say more taxes will cause them to do.
So again, there’s no incentive here. A mild acceleration of existing trends is not economic catastrophe.

[Darth Wedgius]

Any arguement which starts with “how will the government pay for it” is less informed than Ocasio-Cortez, often willfully so. So let’s focus on the other half of that statement, incentives.

So the napkin math I used up there is based on the 2018 Federal Poverty Line. Y’know what that number is?
12,740.
So that’s not a living wage anywhere. So the incentive for folks to literally just stop working? Negligible.
(I’m sure the number of people who will take that is non-zero. But saying it’s substantial is ludicrous on its face.)

It’s better thought of as expanding and rolling into one program measure like TANF, SNAP, unemployment insurance, and a few others. And in so doing reducing overhead and ensuring benefits are accessible and maintaining benefits is not a substantial time sink.
If we insist on viewing things in economic terms, this is best likened to insurance. It reduces the risks of joblessness, and enables those between jobs to better devote their efforts to finding better employment. It additionally increases job mobility in the same way: an abusive or poorly compensating employer has less hold over their employees if they are more thoroughly insured if they leave. It’s an increase to personal bargaining power.

So there’s not a both ends on the incentives. There’s only the possibility that those paying the taxes will fuck off to elsewhere where they can’t be taxed.
But there’s the rub, y’see. We’re already a service/information based economy. Increasingly everyone has already fucked off, and they’re merely stuck with the tabs for the on the ground workers already here: and they can only be replaced by automation, not in foreign lands. And on that front companies have most of the tools they need now. The minimum human involvement is increasingly being found.
The top end bracket is already doing all the things people say more taxes will cause them to do.
So again, there’s no incentive here. A mild acceleration of existing trends is not economic catastrophe.

Does her actual proposal even mention the Federal Poverty Line? Or is that another assumption on your part?

[Admiral X]

Or Cortez is an ignoramus in economics who does not grasp how people in the real world respond to incentives at either end and will cause human suffering if her plans are ever implemented.

Well, she does identify as a socialist.

[CmdrKing]

Does her actual proposal even mention the Federal Poverty Line? Or is that another assumption on your part?

Oh, it’s meant as a “let’s generate the biggest number Relevant to this particular discussion” figure. A worst case scenario if you like.
If Ocasio-Cortez is proposing something more ambitious than “literally pay out the federal Poverty Line in cash to people below it” I will be genuinely surprised.

Y’see, the precise numbers? They don’t matter at this stage of the discussion. The broad scope is relevant just to grapple with the enormity of the problem, and thus the scale solutions need to be. We want to know just how big we need to be thinking to do this thing. Half a trillion is a big number, but not an insurmountable one. A 70% marginal rate gets us about 10% of that, and a quick google tells me SNAP and TANF are another 25%.
So we’re a third of the way there with 5 minutes research. No other programs, no other tax reform, no overhead reduction, not even ACTUAL MATH.
Treating this as pie in the sky nonsense is ludicrous because it’s looking mighty plausible before even doing the hard work.

My point here isn’t to debate specific policy
Or draft legislative language or federal budgets. We, as a society, are letting numbers seem bigger than they are, and assuming we have unsolvable problems due to the math being too hard before actually considering the problem in simplest form. The answer isn’t “nope, the economy can’t take it, better let people suffer”, it never was, and letting ourselves think in that way has crippled us.

What do we need, how do we get there, what steps can we take to make it easier to get there, what precautions will mitigate suffering while we solve and strive toward these solutions. Those are the questions worth asking.

[BridgeConsoleMasher]

Well shouldn't there be some math to establish semblance, even if the measure is in part symbolic? Or would that be more fitting for the House?

[CmdrKing]

Oh, no, the House has to do math. They do the budgets.
But the math part of the debate is later. We’re at the “what are the options to confront this societal problem” stage, and having specific budgetary goals happens later, as programs are designed, committees convened, bills debated, tempered, and honed into something that can become law.

Like Ocasio-Cortez isn’t a genie that blinks her proposed bills into law unaltered. She’s a congresswoman putting forth ideas into the public sphere to change the national conversation on what solutions to our problems are possible, and even if her work is the core foundation of future legislation, it will assuredly be more modest and measured than her rhetoric.