Rep. Ocasio-Cortes has good intentions – she clearly cares about the environment and she wants to make radical changes. That's why she's proposing a "Green New Deal" that would be intended to dramatically reduce carbon emissions. The plan would be all-encompassing, touching on various issue areas, and costing a ton of money, as she admitted in her recent interview with Anderson Cooper.
But as Margaret Thatcher said, the problem with socialism is that you eventually run out of other people's money. Tax rates as high as what's she's proposing — 70 percent — become counter productive because they discourage productivity or encourage high earners to manipulate their income to shield themselves from extreme taxation. We may not know exactly where the tipping point is, but AOC points to the mid-20th century, when there were very high marginal tax rates on high earners… What she may not know is that even during that time the *effective* tax rate paid by the highest earners is not much higher than today. Check out this graph and accompanying explainer from our friends at the Tax Foundation.
But there are even worse problems with her Green New Deal proposal: The greatest costs would not ultimately be borne by wealthy people, but by poor people, who already struggle with energy bills and transportation costs. The same was true of the Clean Power Plan, which the Trump Administration has wisely dropped.
To quote another smart woman, Carly Fiorina often says that the solution to our environmental challenges is not regulation, but innovation. It's good to think big about caring for the earth, but we should look for creative solutions that don't burden Americans with high energy costs or counter-productive tax rates.