America will come to regret its war on taxes

roamerz

I couldn't read the article but at least agree with the title. Taxes should be 1:1 linked with spending. The xx trillion dollar deficit is IMHO unfixable without substantial, painful changes.

Aboutplants

I still think the American people want the government to pay their bills. If a candidate ran on an actual “Balanced Budget” and campaigned on it, boomers would eat it up!

tim333

https://archive.ph/j5FI7

davideg

Gift link: https://www.economist.com/leaders/2026/04/16/america-will-co...

erkanerol

ohh interesting. can wars be a topic on HN? wow. didn’t know.

jeffbee

With Democrats like these...

lokar

I really want to see (good, competitive) candidates making the case for government, and taxes to support it. Most of what people value in public life is supported by taxes (in the sense it would be impossible without them). But the other side has been allowed to criticize taxes and government unfairly with little to no effective opposition. IMO, there is a strong case to be made that waste and corruption is quite low (as a %), and that almost all non-defense spending is spent well and has a positive impact on society, benefiting everyone. I see a growing narrative that successful people "earned" everything they have on their own. People think "I paid my way through university, no one gave me anything", obviously complete nonsense. "I built my business from nothing, with no help from the government", and so on.

sloroo

Tax the rich!

ChicagoDave

The New Deal effective tax rates on individuals and corporations plus subsidies for public college created the greatest middle class in history. It also barred banks from loaning Wall Street money for speculative and risky adventures. In 1980 Reagan began unraveling all of the pillars of that middle class success. 46 years later you can see the damage. Housing is unaffordable even for professional couples. Public colleges are gated to the upper classes. There is no middle class anymore.

fzeroracer

As much as I agree with the benefits of taxes, the Trump admin is showing one of the severe flaws with the American tax system. If the president can just freely choose how and where funds are allocated, then we don't have any actual representation for our taxes. Half the country can vote for a president whose policy is to illegally deny funding to states they don't like. I think the only solution realistically is going to be continued balkanization of the states as they take up more of the tax burden. Which is not going to lead to the outcomes said voters want. It's a shame since I think we really need a proper national healthcare program but if the president can just shut it down on a whim then there's no point.

jandrewrogers

There isn't much juice to squeeze when you make one of the most progressive tax systems in the world even more progressive. Normalizing the idea that the middle class should pay very little tax makes it impossible to raise the necessary revenue as a matter of math.

rossjudson

Everything you need to know about the US tax system in one convenient, incredibly disconcerting package: Ezra Klein https://music.youtube.com/watch?v=mX5U5DNUfBc&si=4XEYfEl6lbW...

nostrademons

I think a lot of the reason for the war on taxes is the exorbitant privilege [1] of owning the world reserve currency. It lets America print as many dollars as it wants, and borrow in a currency it controls entirely. In a normal country this would result in severe inflation, but because America borrows and prints a currency that is necessary abroad to conduct international trade, it is able to "export" a large part of its inflation. In such a system, it is rational to cut taxes as much as possible and instead rely on borrowing and monetization of debt. It allows America to limit the load on its own citizens, who in turn enjoy "exorbitant privilege" in the colloquial rather than economic sense, and then have the costs spread amongst the billions of people who don't live here. Privatize the gains, socialize the losses. The flip side is that if the U.S. dollar ever loses its reserve currency status, that is literally the end of the United States. It will no longer have the ability to fund the government, which is fed by debt that is largely snapped up by foreigners who need a place to park the dollars that move abroad from the persistent trade deficits needed to sustain reserve currency status. It will also no longer have a citizenry or economy capable of doing anything other than moving capital (finance) and jobs (tech) around in the global economy, since in the current reserve currency economy, those are the only sectors that are profitable to go into. If it happens, expect basically a collapse of society and multi-sided civil war. [1] https://en.wikipedia.org/wiki/Exorbitant_privilege

Noaidi

we need to tax (update: sorry, not wealth) income. 90% tax on all income over $100 million. That would mean anyone making $500 million would still be bringing in $40 million a year. If you need more than $40 million a year you are just greedy and want to be some kind of king. This would also mean the power of wealth would be neutralized.

sackfield

Something I have noticed about tax and spend advocates is they have shifted their messaging from "these taxes will pay for great services" to "these taxes will hurt the rich". It's telling that even they have lost faith in the ability for tax increases to provide meaningfully better services as an advertisement. I suppose no one, including myself, would seriously believe it. I am referencing only the American zeitgeist, I assume other countries might have better systems.

davideg

Taxes, if not quite the price of civilisation, do give citizens a reason to care about efficient and effective government. Severing that connection, and leaving large chunks of the electorate as mere recipients of state largesse, risks deepening America’s political dysfunction. We can't have nice things without paying for them. People who believe they are self-sufficient seem to ignore all the public infrastructure that keeps society and the economy moving (e.g. roads, emergency response/firefighters, schools, parks, libraries, etc). Imagine how much more entrepreneurial people could be if taking big big financial risks didn't have dire consequences like not having access to health care. No one loves paying taxes, especially when you don't agree with ways it's spent, but that means we need to fix politics and spend money better rather than denying that society needs financial contributions from almost everybody to function.

pclowes

We developed chronic overspending habits when interest rates were historically low. This made servicing the debt cheap and deficit spending reasonable. Why wouldn’t the government borrow at 0.14% (!!!) with GDP growth at say 3-4%. Now the math doesn’t work with a federal fund rate of 4-5%. And now as our debt rolls over it gets refinanced at the higher rates. Debt servicing is roughly 20% of the government budget and will soon be 25-35% in ~10 years assuming we don’t further accelerate deficit spending (which seems unlikely). US govt needs to cut dramatically to avoid this and the otherwise likely “solution” otherwise is inflation to make the debt effectively less expensive which also raises interest rates. We can’t tax our way out of this. Only 60% of US households earn enough to pay federal income tax. The top 1% of earners already pay roughly half of all tax revenue, top 10% is roughly 75%. Furthermore, there is profligate waste in government, inefficiency, no matter where the taxes came from even if we could materialize them. The government needs to shrink dramatically. This type of change is best done gradually but immediately to avoid later shocks (eg: Medicare suddenly disappears)

haberman

I would be open to paying higher taxes if I believed it would help address the deficit and debt (instead of just enabling more spending) and if I believed that the money was being well spent. Earlier in my adulthood, I would happily vote for almost any tax or levy, because I had faith that that money was turning directly into societal good. I have lost that faith. In the worst case, money seems to be grossly mismanaged (here is a local example from just last month: https://www.seattletimes.com/seattle-news/politics/fallout-f... ). In other cases, it is going to real nonprofits that are tasked with solving problems that never seem to get better, no matter how much money is spent. In yet other cases, the money goes to building transit (something else I was previously very bullish on), but that, once built, seems to be governed by principles of limitless permissiveness (an example from a few days ago: https://komonews.com/news/local/only-8-metro-fare-enforcemen... ) It's hard to feel invested in the programs that my taxes pay for when it doesn't feel like they reflect my values.

xnx

We might be unintentionally moving to a system where paying for government is done mostly through inflation.

burnt-resistor

It started with Regan tax cuts and trickle down voodoo economics. High corporate taxes incentivized business investment that built the middle class. Another stupid move was legalizing stock buybacks that was previously considered stock manipulation. Doesn't even touch that the tax code is purposefully complicated to have zillions of loopholes so the very rich pay little to no taxes while everyone else funds an out-of-control military-industrial complex and socialism for the rich.