"Green New Deal" Proposal

Democrats, including newcomer Alexandria Ocasio-Cortez in Congress are gaining significant attention for their proposal, which is now being called the “Green New Deal”, and which, if it became law, would ambitiously promise that the government will take steps to deliver environmental protections, sustainable wages for all Americans, high-quality health care, education, healthy food for all and more. The proposal, recently crafted into a formal resolution, would undoubtedly be extremely expensive—and also includes an extreme tax hike for the very wealthy—with a top income tax rate that is as high as 70 percent for some super wealthy taxpayers.

We asked two professors and Tax Facts authors with opposing political viewpoints to share their opinions on this sweeping new proposal, its likely impact and the likelihood that it will succeed if presented to Congress as a formal piece of legislation.

Their Votes:

Byrnes

Bloink

Their Reasons:

Below is a summary of the debate that ensued between the two professors.

Byrnes: I think most reasonable people know that the “Green New Deal” proposal is entirely unworkable and could never be passed in its current form. The sheer size and expense of this idea are what make it unworkable, a pipe dream introduced by Democrats who aren’t willing to take responsibility for the cost of the “big government” for which they advocate.

Bloink: The ideas in the Green New Deal should not be hailed as unreasonable. A healthy environment, a guarantee of a living wage and quality health care…these should not be called “pipe dreams”. And yes, it will be expensive to accomplish these ambitious goals, which is why a significant tax increase on extremely wealthy Americans who can afford to shoulder that tax burden, has also been proposed by the same members of Congress.

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Byrnes: A 70 percent tax burden on the income of hardworking Americans is unreasonably regardless of how much wealth that hard work has allowed them to accumulate! Think about the negative repercussions of such an imbalanced taxing system. When taxes rise like this, Americans have less incentive to work—because they get to keep less of their income. Wealthy taxpayers who own business and provide gainful employment to hundreds of equally hardworking Americans will be forced to cut down on investment and growth, resulting in job cuts and having an overall negative impact on the strength of our economy.

Bloink: This deal also proposes investing the proceeds of these tax hikes in the future of all Americans—creating new opportunities for growth and “green” technology and innovation to bring us into the future. Look at where American stands in relation to other developed nations (where, notably, taxes on everyone tend to be significantly higher than in the U.S.). We’ve reduced the corporate tax rate so dramatically, increasing the income tax burden that we impose on the super-rich who also tend to own or profit from these large corporations, is a fair trade off.

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Byrnes: Professor Bloink is forgetting that the trickle down impact of reduced taxes works both ways. Such a significant increase in taxes eliminates the profit motive that keeps this country growing and our economy strong. We need to incentivize hard work, not penalize taxpayers for their efforts.

Bloink: And Professor Byrnes’ arguments fail to take into account the fact that the super-rich will still be super-rich if this new system of increased taxes is imposed. Remember that a 70 percent top rate does not literally mean that we’ll be taking away 70 percent of every wealthy taxpayer’s wealth, our tax system just doesn’t work that way. We’re also talking about super wealthy taxpayers who invest substantially in avoiding their fair share of federal income taxes—meaning that, at some level, the Green New Deal would create a more equal tax system if it is eventually successful, which I hope it will be.