A taxing subject

Thanks to freshman congress critter Alexandra Ocasio Cortez, we woke up this morning to a debate on taxes.  It seems AOC is advocating for a maximum federal tax rate of up to 73% for high earners.  She is backed by solid evidence that "soaking the rich", and using the money in ways which invigorate the economy actually works much better than the trickle down theory which most GOP politicians and their house economists back.  Paul Krugman in the NYT published a chart showing that when the US had the highest marginal tax rate in the world just after WW2, the economy was supercharged.  As we successively reduced the tax rate the rich pay, the economy has followed a downward trend.  As Krugman points out, we are not in a perfectly competitive economy as the GOP would claim.  Instead, there are many built in or legislated inequalities which those at the top of the economic pyramid use to maintain their power and pass it on to their children at the expense of the majority.  The rich can pay vastly higher taxes without any damage to the economy.  At rates in excess of 80%, the incentive to work is greatly reduced, but as my old boss and patron saint of this blog pointed out, "you can only drink one bottle of wine at a time".   A man with an income of 10 million dollars/year paying a 70% tax rate (including state and local taxes) would still have 3 million dollars available each year to buy whatever.  The fact AOC's policy prescriptions are making republican heads explode is a sign she may be on to something.   In any case, we need to have this debate in a vibrant democracy.