Ocasio-Cortez on How to Pay for Her Ideas: Raise Taxes, Cut Military Spending

July 27, 2018

Democratic congressional candidate Alexandria Ocasio-Cortez said Thursday the U.S. government should fund her federal government program and policy ideas by raising taxes and cutting military spending.

Trevor Noah, host of Comedy Central's "The Daily Show," asked the democratic socialist how she would pay for her ambitious agenda that includes universal health care, tuition free higher education, and 100 percent use of renewable energy, among other programs.

"One of the key things that I want to speak to you about, then, is those ideas, I think most people would agree on, especially if they don't know the label that they are attached to, you know," Noah said in reference to Ocasio-Cortez being labeled as a socialist. "But then, the pragmatic side of it comes in, as you said, 'how do you pay for these?'"

Ocasio-Cortez responded in a long and jumbled answer, which included her saying she sat down with a Nobel Prize winning economist to discuss that question. She determined corporations and the ultra wealthy should pay their "fair share," a carbon tax should be implemented, and military spending should be cut.

This is an excellent, excellent question. And in fact there's a lot of the back-of-the-envelope stuff based on our values. So, for example, I sat down with a Nobel Prize economist last week – I can't believe I can say that, it's really weird – but one of the things that we saw is, if people pay their fair share, if corporations and the ultra wealthy – for example, as Warren Buffett likes to say, if he pays as much as his secretary paid, if he paid a 15 percent tax rate – ... [and] if we reverse the tax bill but raised our corporate tax rate to 28 percent, which is not even as high as it was before,  if we do those two things and close some of those loopholes, that's $2 trillion right there. That's $2 trillion in ten years, and one of the wide estimates is that it's going to take $3 - $4 trillion to transition us to 100 percent renewable economy.

So we have $2 trillion from folks paying their fair share, which they weren't paying before the Trump tax bill. They weren't paying that before the Trump tax bill. If we get people to pay their fair share, that's $2 trillion in ten years. Now, if we implement a carbon tax on top of that so that we can transition and financially incentivize people away from fossil fuels – if we implement a carbon tax, that's an additional amount of a large amount of revenue that we can have.

Then, the last key, which is extremely important, is reprioritization. Just last year we gave the military a $700 billion budget increase, which they didn't even ask for! They're, like, 'we don't want another fighter jet!' They're, like, 'don't give us another nuclear bomb,' you know? They didn't even ask for it, and we gave it to them. So a lot of what we need to do is reprioritize what we want accomplish as a nation. Really what this is about is saying health care is important enough for us to put first. Education is important enough for us to put first. That is a decision that requires political and moral courage from both parts of the aisle, period.

While the New York Democrat said the military received a $700 billion budget increase, the defense budget was, rather, increased to just under $700 billion with the 2018 National Defense Authorization Act. The 2018 and the expected 2019 increase to the defense budget do represent one of the largest increases in modern U.S. history, which contrasts a budget that was consistently lowered while President Barack Obama was in office.  The defense budget is expected to jump about 9.3 percent from 2017 to 2019.

Ocasio-Cortez addressed how she would pay for the U.S. to transition to a 100 percent renewable energy economy but failed to mention how she would pay for tuition free education and universal health care.

The Tax Policy Center estimated Sen. Bernie Sanders' (I., Vt.) single-payer health care plan would cost $32 trillion and add $18 trillion to the debt over ten years. Ocasio-Cortez didn't address what new taxes or "reprioritization" would be used to pay for a plan of the sort.