SOAK-THE-RICH tax schemes are in vogue on the left these days.
Democratic Party heartthrob Alexandria Ocasio-Cortez made a splash last month when she went on "60 Minutes" and proposed a 70 percent marginal tax rate on incomes over $10 million. "People are going to have to start paying their fair share in taxes," she said.
From Senator Elizabeth Warren comes a proposal to levy an annual wealth tax on the net worth of American households with more than $50 million in assets. Vermont Senator Bernie Sanders has drafted a proposal to sharply increase the federal estate tax, imposing a top rate of 77 percent on estates worth more than $1 billion.
The details of these plans differ. But all of them are premised on the belief that wealthy Americans don't pay an equitable share of the tax burden, and that a more progressive tax code will not only be fairer but also raise more revenue.
For some politicians, taxing the wealthy more harshly seems as much a matter of retribution as of fiscal policy. "The rich & powerful run Washington," tweeted Warren as she released her tax plan. "It's a system that's rigged for the top if I ever saw one." Sanders routinely inveighs against "the greed of Wall Street, the power of gigantic multinational corporations, and the influence of the global billionaire class."
Americans have traditionally been cool to such overt class-war rhetoric, but maybe that's changing. Recent polls show broad support for raising tax rates on the very wealthy. A Hill-HarrisX survey in January found that nearly 6 in 10 registered voters favored raising the top income-tax rate to 70 percent. Strong majorities of Democrats (71 percent) and Independents (60 percent) backed the idea, and even 45 percent of Republicans expressed support. Other surveys have yielded comparable results, as Politico reported in a story headlined "Soak the rich? Americans say go for it."
Yet however popular it may be to claim that millionaires and billionaires don't shoulder their share of the tax burden, it isn't true. The federal income tax is highly progressive. The ultra-wealthy not only pay far more than their fair share in taxes, but the portion of the tax burden they shoulder has grown significantly in recent decades. . . .