President Donald Trump on Thursday suggested that Venezuela's economic collapse was caused by policies similar to Rep. Alexandria Ocasio-Cortez's (D., N.Y.) proposal to implement a top marginal tax rate of 70 percent on the wealthy.
Trump's comment came in response to a reporter's question about how closely he was following the political turmoil in Venezuala, where Juan Guaidó, the leader of the legislature, declared himself president in opposition to dictator Nicolás Maduro. On Thursday, Secretary of State Mike Pompeo declared Maduro an illegitimate leader.
"We've been looking at Venezuela. It's a very sad situation," Trump said. "That was the richest state in all of that area. That's a big, beautiful area and by far the richest. And now it's one of the poorest places in the world. That's what socialism gets you, when they want to raise your taxes to 70 percent."
Trump went on to say that the United States should learn a lesson from Venezuela and not make the same mistakes.
"You know, it's interesting, I've been watching our future opponents talking about 70 percent. Number one, they can't do it for 70 percent. It's gotta be probably twice that number," he said. "But, maybe more importantly, what happens is, you really have to study, to take a look at what's happened to Venezuela. It is a very, very sad situation. So we have our eye very closely on Venezuela."
Ocasio-Cortez proposed a 70 percent tax rate on the wealthiest Americans earlier this month, arguing that it would be similar to high tax rates of the mid-20th century and calling herself a "radical" in the vein of Abraham Lincoln and Franklin Delano Roosevelt.
"You look at our tax rates back in the '60s, and when you have a progressive tax rate system, your tax rate, let's say from $0-$75,000 may be 10 percent or 15 percent, et cetera, 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," she said in an interview on "60 Minutes." "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."
Sen. Elizabeth Warren (D., Mass.), a 2020 presidential candidate, proposed a similar tax plan on Thursday. The "wealth tax" would only apply to Americans with more than $50 million in assets.
Venezuela's inflation rate hit 80,000 percent at the end of 2018, in large part due to mismanaged socialist policies, and the country's economy has collapsed.