Why the Green New Deal Is Financially Lethal

Much attention has been paid to the extravagant goals of the Green New Deal, now endorsed by a large portion of the declared Democratic presidential hopefuls. Much of the reaction of non-candidates has fallen at one of two extremes: (1) it’s aspirational but a starting point for serious discussion; or (2) much of it is ludicrous on its face. (Almost no one seems to think it’s a serious proposal, except maybe a group of petulant schoolchildren who were rebuffed by Sen. Dianne Feinstein.) Largely ignored has been what the costs will be, how our society can pay for it, and its negative impacts on Americans’ health and longevity. 

Even allowing for some moderation in the blueprint that would reduce the costs from impossible to astronomical-but-manageable through contortions in our economy, the numbers are staggering and in the multiple trillions, according to estimates by the American Action Forum. 

It is, therefore, unfeasible for the top 1% or 10% or even 25% of our income earners to finance the GND. There just isn’t enough income to tax short of total confiscation. (And maybe not even then.) 

As of the most recent available data, the top 50% of all earners account for about $8 trillion-$9 trillion in Americans’ income and produce somewhere between $1.5 trillion and $2 trillion in tax receipts (excluding Social Security and Medicare taxes). The top 10% account for only half of this income but 70% of the taxes. The lower half contribute a mere 2.7% of income taxes. Thus, to raise multiple trillions would require tapping fully half of the U.S. population, which when coupled with Social Security, Medicare, and state and local taxes would impose a huge loss of wealth on everybody with assets and significant earning power. The “rich” simply do not have enough income to tax. 

This table, from the American Action Forum’s analysis, says it all: 
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