America actually needs a tax base.
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.
