(Bloomberg Businessweek) — Alexandria Ocasio-Cortez might not have seen eye to eye with Joseph Overton, the late free-market advocate. But she has a firm grasp of the concept for which he is best known: the Overton Window. The term refers to the range of ideas that are at any given time considered worthy of public discussion. Thanks largely to her, the Overton Window on tax rates has just been moved significantly to the left.
Ocasio-Cortez, the mediagenic 29-year-old from the Bronx, N.Y., is the youngest woman ever elected to the House of Representatives. In an appearance on 60 Minutes with Anderson Cooper that aired on Jan. 6, she was talking up the Green New Deal, a plan to move the U.S. to 100 percent renewable energy by 2035. Cooper challenged her by saying the program would require raising taxes. “There’s an element, yeah, where people are going to have to start paying their fair share,” she replied. Asked for specifics, she said, “Once you get to the tippy tops, on your 10 millionth dollar, sometimes you see tax rates as high as 60 or 70 percent.”
Seventy percent! For perspective, the top rate under the tax law that passed in December 2017 is 37 percent. And now, suddenly, a number so extreme that no one in polite society dared utter it became a focal point of debate. Ocasio-Cortez’s fans—she has 2.4 million followers on Twitter alone—loved it. Some pundits dug up economic research defending rates in the 70 percent range. Others pointed out that Ocasio-Cortez was actually lowballing the historical comparison: Top rates were 90 percent or higher as recently as the 1960s. Defenders of low tax rates heaped abuse on her, which backfired on them by inflaming her supporters.
Implicit in that statement: Ocasio-Cortez has plenty more Overton Windows to shift and no intention of slowing down for the critics. Aside from the Green New Deal and higher taxes on the rich, she favors Medicare for all, a federal guarantee of a job, abolition of the U.S. Immigration and Customs Enforcement bureau, and tuition-free college or trade school. She also wants to slash military spending, ban assault weapons, and bring back Glass-Steagall, the Depression-era law that separated commercial and investment banks.
That may all sound like tail risk to American businesses, which have been enjoying deregulation under Trump. Saikat Chakrabarti, Ocasio-Cortez’s chief of staff, says, “This is the kind of plan where you can’t go to Wall Street executives first to try to get them to buy into it. You gotta show ’em.”