Alexandria Ocasio-Cortez’s Tax Proposal Rattles Billionaires at Davos
Rep. Alexandria Ocasio-Cortez, D-N.Y., during a 60 Minutes interview with Anderson Cooper on Jan. 6, proposed a 70 percent marginal tax rate on income earned above $10 million. Cooper called this “radical.” The proposal has earned extensive media coverage, and has been debated by pundits on both sides of the political aisle.
One group that is not thrilled, according to Hugh Son and Brian Schwartz of CNBC, are attendees at the World Economic Forum at Davos, Switzerland, the annual gathering of international business and political leaders who meet to discuss the state of the world economy. “It’s scary,” Scott Minerd, global chief investment officer for Guggenheim Partners, told CNBC, adding, “By the time we get to the presidential election, this is going to gain more momentum. … I think the likelihood that a 70 percent tax rate, or something like that, becomes policy is actually very real.”
Stephen Schwartzman, the CEO of Blackstone, a private equity firm and a major Republican donor, sarcastically (as reported by Son and Schwartz) told CNBC that he is “wildly enthusiastic,” about the plan.
Another billionaire, who declined to be named, told CNBC that despite the massive media attention around Ocasio-Cortez’s interview, Democrats would not be likely to support the plan. “It’s not going to happen—trust me,” he said.
One prominent Democrat interviewed at Davos agreed. Glenn Hutchins, founder of the private equity firm Silver Lake Partners, who CNBC calls a member of the “Democratic establishment,” said, “The important thing in my view is not to try to score political points with having a 70 percent, very high tax rate. The important thing is to try to figure out a tax system that is both fair and efficient.”
Although Davos attendees and Anderson Cooper see Ocasio-Cortez’s proposal as extreme, as Vox points out, “[The] top tax rates used to be much higher,” adding, “Under [President] Eisenhower, the top earners paid a 91 percent marginal rate, falling to Ocasio-Cortez’s proposed 70 percent under Kennedy and Johnson, before falling to 50 percent after Ronald Reagan’s first big tax cut, and then down to 38 percent after the 1986 tax reform.”of
While the proposal is just two weeks old, early surveys indicate Americans are receptive to Ocasio-Cortez’s idea. One poll, from The Hill-HarrisX, suggests that the idea may gaining favor with the public, as 59 percent of respondents answered yes to the question, “Would you favor or oppose a tax proposal that would apply a 70% rate to the 10 millionth dollar and beyond for individuals making $10 million a year or more in reportable income.” This includes 45 percent of Republican respondents.
Defending her plan on Twitter, Ocasio-Cortez wrote on Tuesday, “It’s wild that some people are more scared of a marginal tax rate than the fact that 40% of Americans struggle to pay for at least one basic need, like food or rent.”