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Alexandria Ocasio-Cortez recently?suggested?raising the top tax rate to 70 percent in order to raise money to fund climate change investments. Conservatives were dismayed by the proposal while liberals and leftists generally?defended?the proposal by pointing to the fact that top tax rates in the US were once 91 percent and by pointing to tax scholarship that says rates that high (or even higher) are optimal. One thing missing from the discussion so far is the point that a 70 percent top tax rate exists, not merely in midcentury US tax codes or in academic papers, but also in the real world right now. Sweden has a 70 percent marginal tax rate and it kicks in, not at $10 million like AOC proposes, but at around $98,000. AOC’s proposal is quite modest by comparison.
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