WASHINGTON: Freshman Congresswoman Alexandria Ocasio-Cortez (AOC) wants a number of laws changed that will ultimately re-distribute income away from people that earned it and toward people who haven’t earned it. She says it is simply unfair that some people have so much and others have so little. She wants to kill Presiden’t Trump’s high growth economy.
AOC is a member of the Democratic Socialists of America (DSA) whose ancestor was the Socialist Party of America.
The DSA has some very specific goals. They want to end private ownership of a number of industries, especially those industries whose products are viewed as “necessities.” In addition, the DSA wants to “democratize” private businesses in order to force owners to give workers control of the business.
Socialists want high marginal tax rates.
AOC has suggested that the highest marginal tax rate should be increased from the current 37% to 70%. She says that the government can use those extra tax dollars to pay for healthcare and higher education for all Americans.
Most Americans do not approve of these actions. History shows why.
The US went from birth in 1776 to being the most prosperous, most powerful and most advanced country in the world in about 150 years. This was accomplished because our Capitalistic system encouraged individual freedom and individual responsibility.
It is a system that rewards people who make contributions and does not reward people who do not contribute.
The US has generally had low taxes.
That changed somewhat in the 20th century when the US imposed a number of new permanent taxes including the federal income tax, the social security tax, and the Medicare tax. Individual states added their own income tax, property taxes, sales taxes and special taxes on things like gasoline, alcohol, and soda pop.
Still, the US income earner is taxed less than income earners in most other countries.
Implementing socialistic policies would result in a slow growth economy which would reduce the standard of living for all Americans. Most countries that have implemented socialism like Cuba and Venezuela have very poor living conditions.
Some socialistic countries like Sweden and Norway tend to have a high standard of living, and happy people mostly because they have no desire to become the biggest or the best.
They also do not completely practice pure Socialism like Cuba or Venezuela.
In those Scandinavian countries, there is a sharing culture where Democratic Socialism seems to fit. It is also interesting to note that these countries are hundreds and almost a thousand years older than the US. Their population base is relatively small with the total number of people in these Nordic countries equaling about 27 million.
The US has about 330 million people.
Socialism appeals to millennials in the US.
In spite of Socialism going against everything that made America great, there are a surprising number of young people who support AOC, the DSA and the concept of Socialism. These millennials want the government to raise taxes on those that contribute the most and use the funds to pay for their healthcare, their higher education and an expanded welfare program.
Although there were periods in US history where the Socialism movement gained some steam, never have we seen so many young people supporting Socialism over Capitalism. Most Americans would agree that Socialism would be a complete disaster for the US.
The high taxes on marginal income would eliminate the incentive to invest for high-income earners and reduce capital formation. In our capital intensive economy, this would slow economic growth. “Free” healthcare and “free” higher education in addition to a higher minimum wage are not the future. Increasing social benefits, including universal basic income, destroy the incentive for workers to seek higher employment and improve their skills.
This too would slow economic growth.
President Trump’s economy is the future of a strong America
In fact, the way to reverse this trend and move these “lost souls” from supporters of Socialism to supporters of Capitalism is to do exactly what President Trump is doing. That is, bring back economic prosperity. Once these people experience true economic prosperity, Socialism will lose its appeal.
Socialism has its appeal today because the US economy has been mired in slow growth for nearly two decades. Annual economic growth hasn’t exceeded 4% since 2000. The growth of 4% or more, would provide an opportunity for all qualified Americans. There would be far less underemployment, and there would be higher wages with more opportunity.
This long period of economic stagnation has resulted in making Socialism seem favorable to a growing group of American. The slow growth of the past two decades did provide an unfair opportunity for those at the top. While those at the lower income levels saw little or no opportunity to contribute.
As a result, they received no income. To someone with nothing, Socialism is appealing.
President Trump was quick to move away from governmental Socialistic behavior. By removing burdensome and counter-productive government regulations to allegedly protect consumers. Unfortunately, the Obama era regulations only added to the cost to business and slowed growth.
Then Trump lowered taxes for all Americans, including the highest income earners and corporations. Since then the high growth economy increases at more than a 3% annual rate.
President Trump is restoring freedom back into the economic system. He is trying to bring true prosperity back to the US. If he is successful, and that will be difficult because every Democrat, the mainstream media and even some members of his own party oppose him, Socialism will lose its appeal.
For the sake of the future of our country, let’s hope he is successful.
President Trump Returns to the White House from New Orleans
President Donald J. Trump walks across the South Lawn of the White House after disembarking Marine One Monday, January 14, 2019, concluding his trip to New Orleans, Louisiana. (Official White House Photo by Joyce N. Boghosian)