Kamala Harris: It's "fantastic" that Ocasio-Cortez proposed a 70% marginal tax rate on the highest earners

Leftists have been quick to remind right-wingers on social media this week that AOC’s proposal of a 70 percent top rate is squarely in line with federal policy under … Dwight Eisenhower. They love pointing to instances years ago when Republican preferences mirrored modern Democrats’; scarcely a day passed during the ObamaCare debate that GOPers weren’t reminded that O-Care was in vogue a decade earlier on the right when it was known as RomneyCare. True, but (a) if we’re holding the other side to the standards of its forebears, there’s a lot that can be said to Democrats about the national debt, entitlements, and defense spending, and (b) in light of the party’s completely predictable shift towards single-payer, maybe the ObamaCare debate has come full circle. Maybe the right should focus more on reminding liberals that they were quite supportive of a policy endorsed and enacted by Barack Obama and Nancy Pelosi that left health insurance in the private sector’s hands.

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“Preferences change,” the left would say to that. Well, exactly.

Anyway, this clip is as interesting for what isn’t said as what is. It’s true that Harris calls it “fantastic” that AOC floated a big tax hike on the rich — but she never quite gets around to endorsing it, despite the fact that she’ll be running to the left in the 2020 primaries. What she’s trying to do here is simply flatter Ocasio-Cortez, knowing that progressives will appreciate it and hoping that it puts her in contention for AOC’s endorsement. All she says with respect to the actual proposal is some anodyne dreck about how it’s good to challenge the status quo and take a look periodically at old, longstanding policies. The problem with expecting her to break sharply from Reagan-era tax rates, though, is that she has plenty of rich friends whom she’s hoping will help bankroll her campaign who want America to be more socialist but not quite so socialist that another 30 percent of their income is up in smoke every year. And Harris probably understands, as AOC may not, that middle-class voters will hear chatter about massive new taxes on the rich and wonder what it might portend for new taxes on them. It’s farcical to believe Democrats might stick a 70 percent rate on the top one percent while steadfastly maintaining rates of half that amount or less for lower earners. Especially given the fiscal reality of paying for government:

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There is a reason that other nations in the Anglosphere do not have anything close to such a [high] tax — even as they spend in a way that would appeal to Ocasio-Cortez — and that is that such taxes do not really do much good. Most people who make tens of millions of dollars rarely derive the lion’s share of their money from traditional income — and, should such a bracket be added to the books, the few who do would quickly restructure. The top tax rates in comparable Anglosphere countries such as Britain, Canada, Australia, and New Zealand are 45 percent, 33 percent (federal), 45 percent, and 33 percent respectively. There is no 70 percent rate in any of those countries — on millionaires, on billionaires, or otherwise. Hell, there is no 50 percent rate, either.

This is not to say that there is no difference between the way that those nations operate and the United States operates. On the contrary: Unlike the United States, those nations do have much higher taxes — on their middle classes.

Why? Well, because that’s where the money is.

If you want a Euro-style welfare system you need a Euro-style soaking of the middle class to pay for it. That’s no concern for a blue-district rep like Ocasio-Cortez but potentially a major problem for an aspiring president like Harris. And Harris would understand this problem better than most, hailing from a state that already imposes its own 12 percent tax on the highest earners. The AOC plan would leave wealthy Californians facing an 82 percent marginal rate potentially, notes economist Tyler Cowen, and as the need for revenue to fund the Green New Deal became more urgent, the targets of that rate would inevitably slip from the ultra-rich to the very rich to successful professionals like doctors and lawyers — who tend to vote Democratic for now, as Cowen notes. The reason Democrats haven’t aggressively pushed for sky-high tax hikes even on the rich over the past 40 years isn’t because they’re “weak,” it’s because the politics of doing so would quickly turn poisonous for them. Harris knows it.

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But she’s going to have to do this dance in the primaries, as all candidates must, in which she sounds open enough to her base’s ideas to convince them that she might push them earnestly as president but not so clearly enthusiastic about them that it can be used against her in a general election. She reminds me a little here of Ted Cruz in the 2016 primaries, scrambling to stay with Trump on immigration policy so as not to lose populists to him. Cruz started off broadly enthusiastic about tighter borders at the beginning but had to get more and more specific as the campaign wore on to keep pace with Trump; I wonder if Harris will end up in the same position as she tries to keep pace with Bernie or Elizabeth Warren on fiscal policy in the primaries.

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Ed Morrissey 12:40 PM | November 21, 2024
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