Republicans once were interested in the proper way to raise revenue. They once discussed pro-growth tax reform, base broadening, lowering marginal rates, and simplifying the tax code to improve efficiency and economic dynamism. That was a serious conversation rooted in a recognition that taxes can be distortive and that there is a right way and a wrong way to raise revenue. However, part of the argument also involved an implicit assumption that the government should be limited.
But today, too many Republicans act as though tax cuts are good regardless of design or their fiscal effects. Republicans want to extend the Trump tax cuts (or go further) while refusing to touch the largest drivers of government spending: entitlements. They gesture toward economic growth as a cure-all but fail to explain how growth alone — especially considering the design of this particular Bill — could cover a structural gap between what the government takes in and what it spends. In reality, growth alone is unable to accomplish what Republicans say it will.
Democrats, of course, are no better. They champion a vastly expanded government—more benefits, more subsidies, more industrial policy—but aren’t willing to raise taxes broadly enough to pay the bills. Instead, they sell the fantasy that we can fund European-style entitlements by taxing only the rich. Yet that’s mathematically impossible. The U.S. tax code is already highly progressive — more so than in most OECD countries. Making our tax code even more progressive, while politically convenient, won’t come close to covering the rising costs of Social Security, Medicare, and everything else Congress keeps adding to the budget.
The result is a bipartisan delusion: a political class eager to spend without taxing and a public that’s all too willing to let them. But as Milton Friedman famously warned, to spend is to tax. There’s no free lunch. If Congress doesn’t tax to pay for today’s spending, it borrows and it pushes the burden onto future generations. In other words, deficits are just future taxes in disguise.
Another Nobel-laureate economist, James Buchanan, understood this as well. He argued that deficit spending allows politicians to hide the true cost of government, separating the pain of taxation from the pleasure of spending. This disconnect leads to more government than the public would support if they had to pay the full bill today. Consequently, budget deficits aren’t just bad accounting. They’re a political tool used to evade accountability and expand government by stealth.
Regarding your editorial “The Social Security Iceberg Gets Closer” (June 20): In reality the iceberg has been tearing open the hull of our “ship” ever since the Social Security trust began drawing down its fund reserves in 2021. The fund is filled with special issue securities that it presents to the Treasury for payment. Since we are already running a budget deficit, this payment is made possible by Treasury’s issuing more debt. All the fund has done is add a step. This creates the illusion that, for now, the problem of payroll-tax revenues running below benefits payments is being dealt with. It isn’t. The day after the fund runs out will be no different than the day before. Either way, more water will have flowed into the hull, thereby ushering in the day that the ship sinks.
The irony is that this “affordability crisis” is the result of failed Democratic governance. Rent control and eviction limits have caused landlords to take tens of thousands of apartments off the market. A higher minimum wage raised the cost of food and other basics, while rich union contracts keep transportation inefficient and costly. Climate bans and mandates have raised energy costs.
Mr. Mamdani’s solution is more socialism. He wants even higher taxes on already overtaxed businesses and high earners (top city tax rate: 14.78%), government-run grocery stores, free bus rides, and a mandatory freeze on 43% of the city’s rental units. These policies won’t work, but they sound appealing to Democrats who don’t think New York works now.
Art Carden is correct: “Companies don’t need regulation to cut back on ‘excessive packaging.”
Scott Lincicome writes that “Trump’s tariffs have Democrats sounding like — gasp! — libertarians.” Two slices:
When government systems become too onerous and complex, those with the most resources are more easily able to not just accommodate but directly exploit (and profit from) them. This dynamic is right out of the public choice theory textbook—but it’s not something Democrats typically address when introducing new and complicated regulations, subsidies, or tax schemes. In fact, populist Democrats have defended past expansions of the federal bureaucracy, such as Dodd-Frank in 2010, as a necessary safeguard against cronyism, not something that might fuel it. And, once again, they’ve long claimed that deregulation does much the opposite.
Trump’s 2025 tariff regime has again changed their script. That [Democratic Sen. Ed] Markey letter, for example, complained that the Trump administration has used tariff policy to “shower” big corporations with special treatment that they won because they can afford it.
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It’s certainly not the case that folks like Chuck Schumer and Elizabeth Warren have suddenly become Hayekian free traders, and I don’t for a second expect them and many other Democrats to start writing Cato essays on downsizing government. Nevertheless, as someone who watches this stuff way too closely, I’ve been struck by the shift in Democratic rhetoric on U.S. trade policy—and not just because the party abandoned its Clintonian views on the issue decades ago. Instead, prominent Democrats—including some of the most populist among them—are smacking Trump’s tariffs from decidedly libertarian angles and doing so in ways that implicitly contradict longstanding, fundamental views on taxes, regulations, and the government itself.
They’re explaining that taxes are ultimately borne by people, not faceless “corporations.” They’re highlighting how regulatory burdens—including complexity—often fuel big business and cronyism, rather than check them. And they’re noting that, while “soak the rich” might make for a great soundbite, it comes with real costs for millions of American workers and the real economy. It’s all very interesting, and these aren’t the only tariff-related epiphanies Democrats have (kinda, sorta) experienced. (I could devote separate columns to policy uncertainty and executive power alone.)
