Earlier this month, the IRS finished collecting 2025 taxes, taking in an estimated $5.2 trillion from businesses and households. That’s a lot of cash.
But Congress is spending $7 trillion a year, pumping out as much fiscal stimulus now as it did during the Great Recession. All of those excess dollars are spurring retailers to raise prices and the Federal Reserve to slow down interest-rate cuts. Were the economy to tank—because of, say, a war with Iran—we could end up with a toxic combination of widespread joblessness and rampant inflation. Congress is creating long-term risks too. In the coming years, a smaller share of Americans will work and a larger share will require Social Security payments, Medicare, disability-insurance coverage, and long-term care. More mandatory spending plus less revenue plus soaring interest costs on a hefty preexisting debt load add up to a big problem.
Instead of doing something about it, Washington is egging on a nationwide tax revolt. Politicians from both parties are slashing rates and spinning loopholes. They’re telling workers that they shouldn’t have to pay for social services, and that even prosperous Americans are overtaxed. In doing so, they are imperiling the country’s financial security and making it harder for future politicians to pass transformative initiatives. Uncle Sam is going to need to raise some money. And that’s going to be hard to do if Americans see their tax returns not as a fair contribution to the greater good but as a punishment or an injustice.
