>> if you missed any of this discussion you can see it on c-span.org. --to c-span. work and type the u.s. house is beginning its work, the first gavel is at noon. before starting legislative work at about 4:40 far. there are three financial services bills on the calendar. the vote will take place after 6:30 eastern. watch the house live here on c-span. each week in this segment of the washington journal we take a look at how your money is at work in the federal government. on tax policyg and specifically progressive tax proposals. our guest is peter coy, economics editor at bloomberg businessweek and co-author of a recent cover story on new york democrat alexandra o cousin

cortez's tax proposal. what is the last time a freshman member of congress got a cover story about tax proposals in your magazine? has been going since 1929 and i think this is the first. it was a history making event for us. why did you decide to do it this time? guest: the editor of the said, there was a lot of buzz -- in the magazine world you always worry -- we are a weekly magazine, that we are going to miss the wave or be perceived as being played on a story. we did not feel like the alexandria ocasio cortez wave was about to break and that it had more room to build and it -- not host: described her tax plan,

what we are talking about. guest: she does not have a thoroughly worked out tax plan. she is introducing legislation. not introducing legislation. she expressed on 60 minutes the idea that top marginal rates could be much higher than they are now. the concept was she was talking about her green or new deal idea and anderson cooper asks if that is going to cost a lot of money, how will we pay for it and are two going to have to raise taxes? she said, there are a lot of people out there who need to pair there -- pay their fair share and in the past we have had taxes as high a 60 or 70% and the conversation moved on from there. that became the number, the 70% number became injected into the national conversation in a way that has not in a long time. that was the focus of our article. >> how much of the conversation

was happening before she came to congress with the presidential campaign of bernie sanders? sanders tonally was in the same direction as alexandria ocasio cortez, railing against the rich and saying they are not paying their fair share. if you look at what he was proposing, hillary clinton had no increase in the top marginal rate in her plan, bernie sanders had 52%, well shy of the 60 to 70% that aoc casually mentioned. shiftingthat we use is the overton window, that being ,he range of acceptable ideas not necessarily approved ideas but ideas that are acceptable to be talked about because they are within the realm of possibility. by throwing out numbers like 60 or 70% she got a shift in that window to the left.

host: one place where she talked about this plan was on late-night television recently. here is an interview with the freshman congresswoman. whenndria ocasio cortez: we talk about a 70% marginal tax rate it is not on all of your income it is on your 10 million and one dollar. after you make $10 million in one year your dollars after that start to get progressively taxed at a much higher rate. really what that is is it is the tax interpretation of one answer to the question of how much is -- at what level are we really living in access and what kind of society do we want to live in? [applause] do we want to live in a city for example, a city where billionaires have their own helipad.uber

>> can you get those? good to know. >> do we want these kind of folks with helipads in the same city and sane society as people who are working 80 hour weeks and can't feed their kids? >> this kind of tax rate was the norm until the early 80's. >> it was, this is not a new idea. people are yelling, she is a socialist, she wants 70% marginal tax rate. under republican a ministration of dwight eisenhower we had a 90% marginal tax rate. host: progressives and tax policy is our topic. our weekly your money segment. the fund lines for democrats (202) 748-8000. republicans (202) 748-8001. independents (202) 748-8002. guest is peter coy, economic editor of bloomberg businessweek. take us through the reaction to that proposal, some of the pros

and cons that have been put out there since alexandria ocasio cortez has been talking about specifically to 70% rate. >> you can guess that people who like low taxes like grover norquist, he is the one who goes back to the reagan administration and came up with the taxpayer pledge, the one that says i will not raise taxes in my life. a lot of republicans have taken that pledge. for him to have them come on and say this is a frontal assault on the mission that he is successfully prosecuted for more than 20 years now. i talked to him and he tossed it off as, i welcome this because all she is going to do is destroy the democrat chances of winning in the next election. i don't know if that is true. i am not taking sides on the

issue but looking at the polling data it shows that quite a lot of support for higher tax rates on the rich. take literally what she is saying, the 70% rate would not take in and tell you of $10 million in one year, that is a pretty small percentage of the electorate. even if all the people have been hurt by that voted no it would be a drop in the ocean. the only way to defeat a proposal like that is for a lot of people who would never pay that rate to vote against it because they think it is unfair or it would somehow be bad for the u.s. economy. host: can you explain what modern monetary theory is? the idea in a nutshell that if you owe money in your own currency, for money byhe u.s. owes issuing treasury bonds and those are in dollars. as long as you do that you can

never go broke or default i should say. you can always pay interest by making new money. any bank has the power to make money and its own currency. the only reason to ever worry about deficits or high government spending is that it would cause inflation. in the absence of an inflation problem the government can afford to spend more, that is the argument. suny--ye kelton at , there are a handful of economists who believe in this and alexandria ocasio cortez subscribes to their views. it ends up being mostly liberal democrats who believe in modern monetary theory. host: the headline, " alexandria

ocasio cortez is the darling of the left and nightmare of the right, new taxes and medicare and tuition rollout and she is just getting started." peter is one of the authors of those stories. taking your calls this morning. darlene is up first in nevada, a democrat. go ahead. to say a lott want of poor people pay a lot of their income towards income taxes and the outcomes from those income taxes are basically nothing. there is no oversight for public schools and many of our children are not even making it. if we are paying taxes the benefit to how we are supposed to utilize those taxes -- why can't we have more health care? if you get it when you come across the lines as an immigrant or a legal citizen. i think we need to do more as

citizens of america, we need more rights. the solution in your mind more taxes and higher taxes or better use of the tax dollars we have now? caller: it is getting more taxes from people like our current president. ensuring that we have a better use of those taxes. we need to have accountability. there is no accountability. had breast cancer and i got no treatment but i got them a sector me. you, where to tell is the fairness in all of this, a lot of poor people, i lost my section eight housing because my landlord would not approve my -- where are the solutions? we don't have oversight anymore. host: mr. coy i will let you

jump in on the story. >> it is a tough story. the interesting thing in my we -- y withwould the united states ever raise taxes on the rich. if you believe in modern monetary theory you don't need to raise taxes to pay for spending, that is one of the counterintuitive conclusions of that. cooperwer to anderson kind of didn't really fit with her own theory. whenshe could have said she was on the air on 60 minutes was, we don't need to raise taxes to pay for the green new deal, but i want to raise taxes anyway because i think the rich

are living to well and we should take some of that money and redistributed to the poor. she did not say that, it would have been consistent. it probably would've got an even better response rate host: i'm going to show the viewers the chart that is in your story over the top marginal tax rate. walk us through this chart and why you included it. the obvious point that aoc made when she was on that late-night spot was the 60 to 70% is not historically a high number. was as high as the 90's in the 50's and 60's. does that mean it was a good rate? that is a topic of a lot of debate among economists. one thing that does happens when you make rates that high is you get a lot of tax sheltering. we put money into vehicles that

are not taxed so highly. the second question is whether it discourages economic activity , you might be less willing to if 90% of thess money about some threshold will be taken from you-- if you thought a lot of the extra money you made would go to taxes. these are open questions. a lot of economists have looked at this and said the high tax rates, despite the seemingly logical very that should discourage economic activity not a lot of evidence -- the economy grew quite well. larry is waiting in indiana, republican, good morning. caller: good morning, c-span. i would like to talk about miss cortez.

i think before she got elected to congress was a bartender. i can imagine the stories that went on in that bar talking about economics. economics what she is spewing is nothing but 101 and 102 progressive professors. that is the only thing she is feeling. 70%, 90% tax rate, 90% under eisenhower had tax write off to bring it down to 30%. 25 they 70% brought down to with tax write off. constituentsne the that elected her. let you respond as we show viewers the front page of last weeks edition of bloomberg businessweek area go ahead. the caller is correct that very few people actually paid those extremely high marginal rates. various tax shelters in various

ways to knockdown that rate. that is what i was talking about with the creative accounting. withffective rates, even those various write-offs and shelters were higher than they are now. they are just not strong evidence that high rates are bad or good or that low rates are bad or good. it is frustrating in the economics profession that such an important question after all these years has not been fully resolved. still after all these years not a hard science like physics or chemistry. from texas, and independent. caller: i want to talk about our taxes. i think if they would put 10% that everybody in the whole united states it would solve all the problems. it was a trash

collector and he paid 10% of his yearly income he would be happy to do that. if it's bill gates making billions he would be happy to pay his 10%. there should not be any tax shelters and everybody should pay. it is the people that do not have taxes like churches, like all the big businesses like , car manufacturers, -- a fifthid 10% grader could figure out the taxes and all the people in the irs could be on the border and getting the people to come through. host: is that called a flat tax? isst: the way it does work that if you are below a threshold you pay zero income theand the richer you get higher the bracket is up until the mid-30's.

the reason for that is the feeling that rich people have more wherewithal to pay taxes. they should pay more. poor people have a hard enough life as it is without having to fork over money with income tax. even if you are working class or payr or middle income you your payroll taxes and so on, that is for security and medicare. you don't pay a federal income tax or state income tax. that is called a progressive tax system. one where the rate goes up as you get richer. see the remainder of this washington journal conversation in the c-span video library. go to www.c-span.org and type in tax policy. the u.s. house is about to gavel in to start their week. the day will begin with members offering speeches on any topic. they will be back again briefly at 2:00 p.m. reese turn before starting --