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On 4 January 2019, the CBS television news magazine program 60 Minutes released an excerpt from an interview between freshman Democratic U.S. Rep. Alexandria Ocasio-Cortez of New York and CNN host Anderson Cooper. In that excerpt, Ocasio-Cortez proposed that her ambitious environmental agenda known as the Green New Deal could be funded in part by higher tax rates on the super-wealthy, as reported by Politico: Anderson Cooper responded by proclaiming that such a notion was radical, a view held by many pundits as well. Others, such as Eric Levitz at New York Magazine made the case that Ocasio-Cortez's tax proposal would not have been radical in the past, as the tax rate on high-income earners before the Reagan administration was, in fact, 70%: The highest federal income tax bracket in 1980, which included those households earning $215,400 or more, had a marginal tax rate of 70%. A marginal tax rate of 70% does not mean that, for example, a person earning $10 million would pay $7 million to the federal government for income taxes. The tax bracket system is progressive, so not all of an earner's income is taxed at the highest level, as explained by the Center on Budget and Policy Priorities: The actual percentage of one’s income paid in taxes, known as a person’s effective tax rate, is also reduced through various exemptions, deductions, and assorted loopholes. In 1980, the average effective tax rate for highest-income ($200,000+) earners was just above 40%. By 2015, the average effective tax rate for the highest earners ($2 million+) was 27.5%. As noted by Vox, however, comparing earlier tax schemes to today’s system is not a simple proposition: When speaking specifically about the marginal tax rate for high-income earners, it is factual to state that the top marginal tax rate was 70% in 1980, before the nation’s experiment with trickle-down economics changed that system substantively.
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