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Expand chart
Data: Internal Revenue Service, staff research; Chart: Axios Visuals

There's been a lot of talk about the proposal from Rep. Alexandria Ocasio-Cortez (D-N.Y.) proposal to raise tax rates as high as 70% on America's wealthiest citizens.

Why it matters: An American making $11 million per year filing as single would pay $4,365,687 in taxes under the U.S.' marginal tax code rather than $7,700,000, which would be paid if the tax rate were a flat 70%, as some have suggested. That's a difference of more than $3.3 million annually.

  • The difference for someone making an additional $1 million of income ($11 million instead of $10 million) under Ocasio-Cortez's plan would be about $330,000 in taxes.

Be smart: Here's what she actually said during her interview with "60 Minutes" on Sunday:

"You know, you look at our tax rates back in the '60s and when you have a progressive tax rate system, your tax rate, you know, let's say, from zero to $75,000 may be 10% or 15%, etc ... But once you get to, like, the tippy tops, on your 10 millionth dollar, sometimes you see tax rates as high as 60 or 70 percent. That doesn't mean all $10 million are taxed at an extremely high rate, but it means that as you climb up this ladder you should be contributing more."

A full plan would presumably have new tax brackets, but since Ocasio-Cortez only provides a couple examples in her response, we'll work with the current tax plan, cap the current highest tax bracket of 37% at $500,001-$10,000,000 and add a presumed tax bracket starting at $10,000,001 that's taxed at 70%.

  • Reality check: One could also assume that like in the 60s and 70s (and today), America's ultra rich would find ways to dodge much of that onerous tax bill should this highly improbable proposal ever become law.
  • Bonus reality check: Ocasio-Cortez has been a member of Congress for less than a week so maybe we can dial back talking about her tax plans for a bit.

Go deeper: Wealthy Americans are already exploiting the tax plan

Go deeper

3 mins ago - World

Jimmy Lai among Hong Kong pro-democracy leaders sentenced to prison

Students standing under a banner during a flag raising ceremony on the first annual National Security Education Day in Hong Kong. Photo: Vernon Yuen/NurPhoto via Getty Images

A Hong Kong court sentenced a group of pro-democracy activists to up to 18 months in prison Friday for organizing a massive unauthorized protest in August 2019 that drew an estimated 1.7 million people, AP reports.

Why it matters: Critics say the sentences send the message that even peaceful pro-democracy activism will be severely punished. They mark a continuation of Beijing's overhaul of Hong Kong's political structure, designed to crack down opposition to the Chinese Communist Party.

Local news moves to the inbox

Illustration: Annelise Capossela/Axios

A slew of new companies are launching platforms for local newsletters, a shift that could help finally bring the local news industry into the digital era.

Driving the news: Substack, the email publishing platform for independent journalists, on Thursday announced a new local news platform.

J&J vaccine pause hurts its reputation

Reproduced from Economist/YouGov poll; Chart: Axios Visuals

Americans' confidence in the safety of Johnson & Johnson's coronavirus vaccine took a big dip this week after the pause in its use, per new YouGov polling, even though the risk of blood clots following the shot is extremely low, if it exists at all.

Why it matters: For the majority of people, particularly high-risk Americans, getting the J&J shot is almost certainly less dangerous than remaining vulnerable to the coronavirus.

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