William G. Gale is senior fellow at the Brookings Institution and author of Fiscal Therapy: Curing America's Debt Addiction and Investing in the Future (Oxford 2019). The opinions expressed in this commentary are his own.

Alexandria Ocasio-Cortez's recent proposal to create a 70% tax bracket on income over $10 million will not become law anytime soon. But the proposal, which would only affect fewer than one in every 1,000 households, has sparked a long overdue discussion about taxing the wealthy. Raising taxes on the rich is the right idea at the right time, but some ways to do so are better than others.

Why should the rich pay more than they already do? First, we need the money, and higher taxes are the only way to get wealthy Americans to bear non-trivial amounts of the fiscal burden. Currently, the economy is at full employment, but the government is running substantial deficits. Low revenues are a big part of the problem; they do not come close to funding current spending. As an aging population pushes up Social Security and Medicare spending in the future, both projected deficits and the need for higher revenues will increase, even if policymakers cut spending somewhat.

Second, high-income households have enjoyed skyrocketing incomes over the past 40 years, but their average tax rates have remained relatively constant. From 1979 to 2015, average market income for those in the top 1% rose by 233%, from $552,000 to $1.84 million (in 2015 dollars). But federal taxes as a share of their income have fallen — from 35% in 1979 to 33% in 2015 — and the 2017 tax cuts reduced them further. In a progressive system like ours, the tax share of income should rise as income rises. High-income households are due for a significant increase in tax burdens.

Third, higher tax burdens on the wealthy would reduce (what economists call) rent seeking, the appropriation of wealth from others without creating new wealth. Studies have shown that countries with lower top marginal tax rates have higher pre-tax income inequality. The logic is that, while lower tax rates on high-income households — introduced in the Reagan, Bush and Trump tax cuts — may have stimulated labor supply and saving, they also raised the return to rent seeking, encouraging, for example, executives to capture a larger share of profits, at the expense of wage earners. Thus, some of the top 1%'s impressive gains may well have come at the expense of, rather than benefit to, the rest of the population.

How to raise taxes on the rich is just as important as why. Simply raising the top rate to 70% would in essence be a full-employment act for tax planners and would create massive sheltering activity. Yes, the top rate was 70% or higher in the 1950s, 60s and 70s, but tax avoidance also thrived.