Where does Alexandria Ocasio-Cortez really fit in best with her media savvy, influencer sized social media following, and powerful perch in Congress, as a working class woman of color or a rich celebrity? The crowd she hangs out with are so powerful they will avoid any negative repercussions, and so connected they’ll likely write any so-called socialist bill themselves, ensuring their wealth and privilege continues.
Last week, firebrand socialist Representative Alexandria Ocasio-Cortez made headlines when she appeared at the Metropolitan Museum of Art’s annual gala in a white dress with the phrase “Tax The Rich” emblazoned in bright red letters on the back. The sight of a self-professed socialist wearing a $10,000 dress at a $30,000 a plate dinner where the guests were all happy and smiling but the largely black and brown help was masked caused conservatives to pounce, bemoaning the hypocrisy of the scene. Progressives, on the other hand, rushed to her defense, claiming she was merely taking the fight onto enemy turf and making an in-your-face statement about her beliefs. Besides, conservatives were merely jealous of her smarts and success anyway. Ms. Ocasio-Cortez herself said, “We really started having a conversation about what it means to be a working class woman of color at the Met…we can’t just play along, but we need to break the fourth wall.”
Perhaps needless to say, the normal partisan food fight erupted from there, completely missing the obvious, underlying point: Alexandria Ocasio-Cortez and the burgeoning socialist movement in general are no threat whatsoever to the kinds of people that can afford $30,000 to go to a party. Yes, the multi-multi-multi-millionaire and billionaire class will happily try to avoid taxes anyway they can, paying high powered accountants to do the dirty work of stiffing the government, but a few percentages here or there doesn’t matter to them in the least. There’s a reason why the wealthiest people in this country, the Fortune 500 CEOs, the super successful technology entrepreneurs, celebrities, and athletes, all claim to be liberal and woke, if not outright socialist: It doesn’t matter to them. They are so rich it makes no difference, so powerful they will avoid any negative repercussions, and so connected they’ll likely write any so-called socialist bill themselves, ensuring their wealth and privilege continues.
It does, however, matter to the middle and upper middle classes. Those that might have better lifestyles and live in more luxury than the poor or working poor, but who lack the wealth and cash reserves to insulate themselves from the vicissitudes of the economy, afford ever increasing college costs for their children, and save for a potentially long retirement with anything resembling peace of mind. It’s this group, professionals and skilled tradespeople that most would consider successful, that will suffer under AOC and Bernie Sanders proposed socialist regime. In fact, they will suffer long before then, even under President Biden’s proposed plans, which we might politely refer to as socialism light. The suffering will include a combination of increased taxes, increased costs on goods and services, and less overall mobility in the marketplace.
First, taxes. Biden has repeatedly promised that he won’t raise taxes on anyone making less than $400,000 per year, but that is a lie. His published plan calls for allowing the Trump tax cuts to expire for individual and family tax filers, which will increase taxes on close to 90% of Americans. Ironically, the group least affected by these increases will be the rich who lost big state and local tax deductions, known as SALT, because the Trump tax plan capped the amount at $10,000. While Biden proposes an increase in their tax rates from 37% to 39.6%, most of that difference will surely be offset by the ability to claim tens of thousands of dollars of local deductions in high tax states. To put this in perspective, the average property tax bill in my home state of NJ is $9,112, right below the cap, but property taxes are easily $20,000 in upper middle class neighborhoods. In wealthy areas, they can be $40,000 or more, and this doesn’t even count state income or other local taxes making this a hidden windfall for the rich that Democrats have long championed, primarily because their constituents are concentrated in high tax states.
Nor is that the only planned increase likely to have an impact on the middle class. Biden also proposes increasing the corporate tax rate from from 21% to 26.5%, claiming this will only impact the wealthy and large corporations. This claim is also entirely false: Corporations don’t pay taxes, their employees and customers do, and what are the odds the wealthy and powerful leading these corporations decide to take the hit themselves for the good of the middle class? Studies have shown repeatedly that high corporate taxes hit workers the hardest, for obvious reasons. Stephen Entin of the Tax Foundation estimates that 70% of a corporate tax increase would result in less wages for workers, while a 2020 study by the National Bureau of Economic Research found that 31% of corporate taxes are passed directly onto consumers.
Utility companies, in particular, have been known to base rates on taxes. Americans for Tax Reform found 300 examples of utility companies passing savings along. What do you think will happen when their rates go up? Make less and pay more, and that’s not all. More taxes means less profits, and lower stock values. At least 53% of families own stock, primarily for retirement, meaning this will make an already challenging retirement situation even more so. In addition, this increase would make our average corporate taxes higher than China and most of the developed world, leaving American companies less competitive and chasing jobs overseas, limiting your upward economic mobility in the process. This will affect big companies and small. At a time when we should be continuing the trend of moving manufacturing back into the United States, we’re back to chasing it away.
Even Major League Baseball is planning to close factories in Minnesota and ship them to China. “This type of transaction, in which wealthy private equity investors buy longstanding U.S. companies only to shut down American plants and move jobs overseas, has left countless Midwest communities devastated while wealthy private equity investors…reap a larger and larger share of our country’s income and wealth,” Senator Tim Smith from Minnesota wrote to the MLB in outrage without any hint of self-awareness: The rich are going to do what they always do, maximize profits and power. Increasing taxes and making us less competitive will lead to more of this, not less. Perhaps Ms. Ocasio-Cortez should’ve asked the designer of her infamous dress, fashionista Aurora James, whether she actually pays her own taxes. Though Aurora James serves the likes of Beyoncé, Rhianna, and Megan Markle, she has a long history of stiffing the government. The IRS has placed six federal liens on the parent company of her fashion brand for a total of $103,220 for a failure to remit payroll taxes. She has three open warrants in New York State and 15 total since 2015. Despite not properly paying her taxes, Ms. James also took advantage of $41,666 in pandemic relief aid.
Income and corporate taxes aren’t the only proposed increases coming for the likes of you and me either. The House Democrats are also planning to double the cigarette tax and pursue something called “tax parity” on related products that are currently taxed lower than your traditional pack of smokes. The rate on chewing tobacco would increase more than 2,000 percent; pipe tobacco and snuff more than 1,600 percent, plus a whole new tax on vaping products. These are taxes that would fall primarily on the working poor. According to the Tax Foundation, a “pack-a-day-smoker making $15,000 a year pays almost 10 percent of their income in tobacco taxes (state and federal). The proposed increase takes that figure to 12 percent. For someone making $35,000 that’s 4.1 percent today and 5.2 percent after the tax increase.”
Of course, the amount of money you take home after taxes is one thing, what you pay for goods and services is another. Inflation has been unexpectedly on the rise this year, reaching levels not seen in at least a decade and resulting in a decline in real wages for Americans. August continued the trend with consumer prices rising 5.3% year over year, actually down slightly from 5.4% in June and July. These price increases were across the board, affecting almost every product in every industry. Food was up, with beef a whopping 12.2% higher, and meat, poultry, fish, and eggs rising at 8%. About the only thing that fell were airline tickets, but that was after a whopping 31.9% increase over the last year. Many experts expect this spike in inflation to be short-lived, but consumer prices aren’t the only costs rapidly rising into the danger zone for an inflationary spiral not seen since the 1970’s. Producer prices were up dramatically in August, 8.3% from a year ago, the biggest increase on record, though the figure has only been tracked for 10 years. Once again, the increase was almost across the board, even health, beauty, and optical goods rose 7.8%. Transportation and warehousing, which influences the cost of everything, was up 2.8%, meaning it’s likely only a matter of time before these increases hit your wallet, especially if they’re accompanied by raising taxes.
Ultimately, the combination is not good news for the middle class consumer, giving the lie to the notion that the Democrats plan to rebuild the economy from the “middle out.” It’s one of the absurd ironies of our era that so-called socialists, or at least espousers of socialism light, dominate the upper echelons of American life and yet they pretend otherwise. Ms. Ocasio-Cortez would like to pretend she’s a rebel spy infiltrating an enemy base or a stranger in a strange land at a fancy, upper crust charity event, but the truth is she’s far more welcome there than at your local VFW. To a large extent, the ultrarich are her base, the leading espousers of both woke ideology and tax-the-rich economic policy, full knowing that none of what they are proposing will affect them or their lavish lifestyles. In fact, it may well help them as inflation causes their massive assets to appreciate faster and creates even more wealth.
This is why she’s adored, fawned upon, and the consequences of her policies pass without question in that company. They are birds of a feather, flocking together. Paula Froelich, writing for The New York Post, described it this way, saying she was done with Democrats in general: “WANTED: one honest, decent, middle-class politician who doesn’t want to be a rich celebrity.” For AOC and her rich, celebrity pals, it’s the ultimate trifecta of virtue signalling: Pretend one of the most powerful Congress people in the country is just a “working class woman of color” rather than one of the elite, act like you care one whit about tax rates or the plight of the poor, and bask in the reflected glow of your warped reality, where rich, insulated, largely white people are champions of the working class and people of color. Such brave champions, indeed, that they walk and talk mask free while the largely black and brown help serving them masks up, rendered a truly faceless proletariat, not even fit to breathe on one of their betters.
In that regard, what side do you think the $10,000 supposedly “borrowed” dress wearing AOC is truly on? Where does she really fit in best with her media savvy, influencer sized social media following, and powerful perch in Congress? I’ll give you a hint: It’s certainly not your average union hall or PTA meeting. Either way, she wants to stick you with the bill, struggling against a tide of raising taxes and prices regardless of whether or not you’re already struggling with college tuition, retirement, buying a car, or simply paying your bills.
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