“Everybody’s poor” in oil-rich Venezuela, and US President Donald Trump’s top economic adviser claims he knows the answer: excessive taxes on the South American nation’s wealthiest citizens. With high-profile Democrats such as Rep. Alexandria Ocasio-Cortez clamoring to raise income tax rates as high as 70%, Larry Kudlow is warning that the US could see a similar “catastrophe.”
Venezuela is a “Catastrophe” Because of High Tax Rate
Kudlow says the “old saw” of higher taxes on the wealthy from America’s political left “never works.” The former CNBC host says he doesn’t know how such proposals will pan out, but he’s already fighting back.
“Look at Venezuela – it’s an absolute catastrophe. They taxed rich people, they taxed everybody and they have equality of sorts – everybody’s poor.”
In the 1960s, Venezuela was a relatively rich country, with per capita GDP larger than Brazil and Colombia and “not far behind” the US, according to Foreign Policy analysis. Falling oil revenues and policies implemented by Hugo Chávez and then Nicolás Maduro caused Venezuela’s fall. During their administrations, Venezuela pursued aggressive tax policies including targeting oil firms with excessive rates.
Larry Kudlow, a White House economic adviser, warned that Democratic tax plans such as the one advocated by Rep. Alexandria Ocasio-Cortez could turn the US into a “catastrophe” like Venezuela. | Source: Shutterstock
As a growing chance that Trump and the Republicans could be ousted from the White House in the upcoming election cycle looms, Kudlow is responding to tax proposals by Democrats Ocasio-Cortez and Sen.