The New York freshman has bold plans to reorient the US economy around climate change and social justice. To pay for that, she wants to raise taxes on the very wealthy, who would see a tax rate of 70% on everything they make over $10 million. (Everything under $10 million would be taxed at lower rates.)
She immediately got dinged for it, because it’s not “like 10” people. But her point — that the merely well-off don’t have to be afraid of her, or the Green New Deal, or “socialism” — is sound, because not very many people make more than $10 million a year.
The vast majority of those returns are for married people filing jointly and for households, so those returns represent more than 16,087 Americans. But that’s nowhere near even 1% of the 150,272,157 total tax returns filed that year.
The total income reported on these top returns was $482,067,421,000. So about 16,000 returns representing about half a trillion dollars of income. They paid a combined $121 billion in taxes.
For comparison, 11.7 million returns reported between $75,000 and $100,000 in income. They combined to pay $108 billion in income tax.
Some are better at the game than others. Of the 16,087 returns reporting $10 million or more income, 16,047 reported taxable income. That suggests 40 tax filers who said they had $10 million or more in income also said they had no taxable income.
Income is not always the same as wealth, however.
Massachusetts Democratic Sen. Elizabeth Warren has noted this with her proposal to place a new annual 2% tax on assets more than $50 million and an additional 1% on assets over $1 billion.
The data company Wealth-X tries to track billionaires and according to their recent annual census, more than a quarter (28.8%) of the world’s billionaires live in the US.
In total, they say 705 billionaires lived in the US in 2018 and they had a combined total wealth of more than $3 trillion. But they’re clustered in cities, according to the group, and San Francisco has the highest concentration.
And California has already benefited from the wealth concentrated in the state — in much the way Ocasio-Cortez and Warren envision.
The federal government, however, recently cut taxes substantially. That means those in the top income brackets will get to keep more of their income unless, or until, an Ocasio-Cortez-style tax plan is implemented.