Depending on who you listen to, the recent proposal by Rep. Alexandria Ocasio-Cortez, D-N.Y., to increase marginal income tax rates to 70 percent is either the craziest thing that has ever been proposed or a sober proposal that does not go far enough.
Historically, 70 percent tax rates were relatively normal in the U.S. Between 1951 and 1963, for example, Americans in the top income tax bracket were taxed at over 90 percent, although that top rate was only paid by a handful of people.
Ocasio-Cortez points to this period as a precedent to return to. But those excessively high tax rates were followed by tax cuts that helped lift the economy in the late 20th century. That necessary shift provides compelling evidence that lower tax rates, even on the rich, are better for everyone.
And that wasn’t the first time tax cuts proved a major success. In the 1920s, tax rates were cut from 71 percent to 24 percent, and the economy grew by a massive 59 percent. In the early 1930s, top rates were raised back to 63 percent, but the Great Depression persisted through the end of the decade.
Read the full story from The Daily Signal
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