Idiot: Matt Bruenig - Sweden Has a 70% Tax Rate and It’s Just Fine

Alexandria Ocasio-Cortez's suggested 70 percent marginal tax rate has conservatives and centrists freaking out. But Sweden shows that soaking the rich is the smart thing to do.

Idiot: Matt Bruenig - Sweden Has a 70% Tax Rate and It’s Just Fine Swedes

Idiot: Matt Bruenig - Sweden Has a 70% Tax Rate and It’s Just Fine Swedes

lexandria 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 United States 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 mid-century 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.

According to the OECD, single Swedish workers making over 867,000 SEK (around $98,000 at prevailing exchange rates) face a 70 percent overall marginal tax rate on all labor compensation earned above that threshold. The below graph decomposes this overall marginal rate into its three parts and shows how much is left for take home pay:

https://www.jacobinmag.com/2019/01/ocasio-cortez-taxes-rich-sweden?fbclid=IwAR3D3kSmIntyL8hOz7DJMHhRyzq1WQIRRuSMrqjebAWs9q0c6a20NplAv9g

Idiot: Matt Bruenig - Sweden Has a 70% Tax Rate and It’s Just Fine

Idiot: Matt Bruenig - Sweden Has a 70% Tax Rate and It’s Just Fine

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