Visions of a 70% Tax Rate

The new socialists need a refresher course in government math.

How much money would the government reap from a 70% tax rate on income above $10 million? Authors Kyle Pomerleau and Huaqun Li looked at two scenarios—one if the rate applied only to ordinary income like wages and interest, and another if it also applied to income from capital gains.

The best case scenario: a 70% rate would raise less than $300 billion in revenue over 10 years, which is less than half of the $700 billion that has been cited in press reports.

.. A 70% top rate would generate even less revenue if extended to capital gains. Investors only pay when they realize gains by selling assets, and they are especially sensitive to tax rates when deciding whether to sell. High rates can leave money locked into a current asset instead of flowing to the next good idea.

.. Ms. Ocasio-Cortez won’t admit it, but she and her socialist friends will eventually have to go where the real money is: The middle class. That means higher tax rates on even modest wage earners; taxes on retirement savings like 401(k)s or college savings accounts.

A Democratic Narrative Misses the Reality of 2018

As Democrats move from success in the 2018 midterms to the early stages of picking a 2020 presidential candidate, a narrative is taking root. It holds that the key Democratic voter today is young, liberal and rebellious—in short, a version of Rep. Alexandria Ocasio-Cortez, the 29-year-old activist who became the youngest congresswoman ever and who appears to be pushing the party to the left.

There is one problem with this narrative. It largely misses the story of the voters who actually delivered success to Democrats last year—and who may determine the outcome of the next presidential race.

It’s certainly true that there was a lot of energy among young, liberal Democrats in 2018, and that figures to be true again in the new presidential cycle.

Yet the Democratic electorate in 2018—the one that swung House seats and governor’s offices from Republican to Democratic—was neither as young nor as liberal as popularly imagined. AP VoteCast, a survey of more than 115,000 self-identified 2018 midterm voters, found that just 15% of those who voted Democratic last November were aged 18 through 29. The largest contingent of Democratic voters—36%—actually were ages 45 through 64.

All told, 60% of Democratic voters were aged 45 or older.

In ideological terms, there is no doubt that the party is moving to the left. An increasing share of Democrats are identifying themselves as liberal. Yet that movement also can be overstated. While half of Democratic voters last year identified themselves as liberal, 48% called themselves moderate or conservative. And moderates outnumbered “very liberal” Democratic voters by two to one.

“The attention may be focused on the left, but the actual energy and votes came from the mainstream and the center,” says Jim Kessler, executive vice president for policy at Third Way, an organization that supports moderate Democrats.

As has been widely noted, the key voters in 2018 were white suburban women, who showed up in large numbers to vent their anger at President Trump by voting Democratic. Yet many of these suburban women weren’t fired-up liberals, but rather centrists who previously supported moderate Republicans in their districts.

Their switch is why many of those moderate Republicans washed out to sea; their fate was sealed more by moderate women rising up to vote Democratic than because of a left-wing insurrection. Indeed, candidates endorsed by the moderate New Democrat coalition flipped 33 of the 42 House seats that went from Republican to Democrat.

Geographically, the keys to Democrats’ success came not in the party’s coastal enclaves—such as Rep. Ocasio-Cortez’s district, which was held by Democrats long before she arrived—but rather in the industrial upper Midwest swing states of Michigan, Wisconsin and Pennsylvania. All three states were won by Mr. Trump in 2016, but Democrats won the popular House vote in those states last fall. Democrats also nominated moderates for governor in all three states—and all three won, by a margin of 1.3 million votes.

This reality is important for Democrats as candidates begin drifting onto the 2020 presidential battlefield. The prevailing narrative suggests not only that the advantage goes to a fresh face who excites the party’s young progressives—think former Rep. Beto O’Rourke of Texas or Sen. Kamala Harris of California—but that such a choice has the best chance of success against Mr. Trump.

And maybe that’s the case. But consider the alternative, suggested by the reality of the midterm election results: The votes that will spell the difference for Democrats lie not on the left and on the coasts, but in the center and in the industrial Midwest.

That’s where Mr. Biden enters the picture. Perhaps the 76-year-old former vice president is too old. He certainly doesn’t meet the desire for “new blood” in politics cited last week by former President Obama.

On the other hand, if the Democrats’ key votes in 2020 will lie among centrists in the industrial Midwest, the more moderate profile of the favorite son of Scranton, Pa., will be an attractive one. Moreover, if voters generally are looking for somebody who knows how to get things done rather than simply create controversy, the guy who once prevented a government shutdown by cutting a big budget deal with Republican Sen. Mitch McConnell may have some appeal.

It’s too early to know, of course—but there is more than one narrative at work for Democrats.

When Honest Women Replace ‘Self-Made’ Men

Female politicians show that rising to power is a group effort.

At the end of this month, Nancy Pelosi will retake her position on the podium behind the president as he gives his State of the Union address. As speaker of a House that is more female and more racially diverse than at any time in American history, Ms. Pelosi on the dais will represent more than just Democratic gains: She will be a visual symbol of a profound shift in how those with power might wield it.

For too long, female power has been calculated using the arbitrary measuring stick of how men exercised authority; women, as a result, largely shaped themselves to these male-determined standards and norms. But the women of the 116th Congress are redefining what it means to be powerful and reshaping some of the most dearly held American fables in the process.

Power, for all of American history, has been white and male, and maintaining that monopoly has required a series of agreed-upon conventions and plotlines. A handful of women and people of color have, in recent years, managed to get a foot in the door, but the definition of what power means, and the male-centered story of how one gets it, remains in place.

According to this script, power is meritocratic; those who earn it do so individually through their own hard work. Power has a particular look and a particular sound: tall and deep-voiced. Power is all-encompassing: a partner and children are the backdrop for a life centered on the pursuit of greatness; family indicates that the powerful person is grounded enough to be trusted, but the family is fundamentally a body that benefits from the powerful person, not a body that benefits him and fundamentally enables his success.

Within this story of meritocracy is the promise that anyone can achieve political power and success if they are good enough and if they work hard enough; that elected offices have for so long so wholly rested in male hands suggests simply that men have long been more worthy of them.

As a result, and by necessity, barrier breakers have largely followed this same script, from the practical to the descriptive to the aesthetic. When women and people of color did gain political power, their ascension was often used to prop up the existing meritocratic narrative: They had achieved, and so anyone can. The subtext: Perhaps the dearth of women and people of color in office meant they hadn’t worked hard enough for it.

This narrative of American political power is pervasive enough to be largely invisible. The women who folded themselves into the existing story were perhaps not so much doing it intentionally as acting according to the script on offer, without much space to imagine something different.

But as more women have entered the political realm, they have created more space for authenticity over self-aggrandizement. This is especially true as politicians come from a wider diversity of communities and backgrounds, each with different norms around authority.

Today’s rising female politicians tell a very different story than “I worked hard, and so I got here by myself.” One by one, they credit those who inspired their success, supported their ascent and cleared the trail so they could walk further still.