Surprise: Debt Conversation Brings More Pointless ‘Tax-the-Rich’ Talk
27th May 2023
Whenever we have a national conversation about government debt, Democrats invariably respond that spending is not the reason the debt is now nearly equal to our national GDP. The real cause of our indebtedness, they inform us, is that taxes aren’t high enough and the rich don’t pay their fair share. From increasing the marginal tax rate to more than 70% for higher-income earners, to taxing 100% of income above $1 billion, to the president’s recent debt-ceiling plan, Democrats overflow with ideas about how to tax us more.
Not only do these ideas reflect incredible ignorance of economic reality, they’re also unlikely to have any meaningful effect on our debt levels and would surely slow the economy.
Let’s be clear: America’s debt problem isn’t the result of former President Donald Trump’s tax cuts. While I believe these tax cuts should have been offset by closing some of our many loopholes and reducing government spending, they didn’t cause our fiscal problems. The fiscal imbalance is not because of reduced revenues. Last year, federal revenue as a share of the economy was a full percentage point above the historical average.