Taxes

Tax the Rich All You Want. It Won't Fix the Deficit.

The problem is not that the government collects too little. It's that the government spends too much.

Veronique de Rugy | 3.12.2026 4:15 PM

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Wherever you look in American politics right now, you'll find legislators saying the government still doesn't tax enough—especially when it comes to the wealthy. California progressives are pursuing a wealth tax on billionaires, advertised as a method to raise $100 billion in a single stroke. New York City Mayor Zohran Mamdani is pushing for sweeping new taxes on the wealthy to fund a vast expansion of city services. And Washington state politicians are treating a preventable budget problem as a failure to sufficiently tax corporations and the rich.

The same is true on the national stage. Progressives including Sens. Bernie Sanders (I–Vt.) and Elizabeth Warren (D–Mass.) have spent years insisting the deficit is fundamentally a revenue problem. Republicans embrace tariff collections in the name of raising revenue too. And, as Cato Institute tax scholar Adam Michel observes, they've drifted toward justifying tax cuts as "paying for themselves" rather than as a principled reduction in the size of government, implicitly conceding that revenue is the variable to focus on.

They're all wrong. The problem is not that the government collects too little. It's that the government spends too much.

In 1950, Michel documents, total........

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