In a nation seemingly unable to agree on anything, people appear to be converging on one idea: Taxes are bad. In addition to the calls for broad-based middle-class tax cuts, we’re seeing proposed exemptions for teachers, law enforcement officials and boat owners. Call it the Oprah tax code: Tipped workers, YOU get a tax break! Teachers, YOU get a tax break! Overtime workers, YOU get a tax break! These suggestions aren’t coming just from Republicans, the longtime proponents of small government and no-new-tax pledges. Today these ideas are attracting people across the political spectrum, including Democratic lawmakers like the senators Chris Van Hollen and Cory Booker, the latter of whom advocates a system by which “the majority of Americans would not pay federal income taxes.”
It’s no great mystery why people like the idea of lower taxes. After years of pandemic-era inflation, compounded by tariffs and, more recently, the war in Iran, 55 percent of Americans say their financial situation is getting worse, the highest reported level since Gallup began asking this question 25 years ago. President Trump promised to lower prices on Day 1, but no policies can accomplish anything like that. Tax cuts offer a salve: Keep more money in your wallet, so those high costs seem more manageable. And indeed, this tax season, Americans are getting a refund that is, on average, about $350 larger than last year.
It all sounds good, but this profusion of new carve-outs would make the already Byzantine tax code only more complex, worsening our fiscal situation without fixing any of the problems that make America feel unaffordable today. Tax cuts are a Band-Aid, not a solution.
The thing is, America is already a low-tax country — far lower, as a share of gross domestic product, than almost all other highly developed economies. Sure, there are wasteful inefficiencies that can and should be eliminated. As DOGE’s rampage shows, however, you can cut enough to ruin a great many lives, but you can’t significantly decrease the government’s expenses, because most of them are baked in.
So if the tax rate goes much lower, it will cease to be possible to run this large and complex country. To some people, that’s the point: to shrink government until it’s small enough that someone can “drag it into the bathroom and drown it in the bathtub,” in the memorable phrase of the anti-tax crusader Grover Norquist.
For those who prefer not to live in a failed state, the other option is to keep taxes steady, or even raise them for some who can easily afford the difference, and in exchange give Americans a government that works. A government that builds highways and schools, defends us against adversaries, lifts children out of poverty and supports those who may be displaced by artificial intelligence.
That takes more revenue, not less, but it makes the taxes you pay worth it, because you get so much more in return. And if it’s done right, it makes life in America more affordable. Tax dollars can help the 25 percent of American registered voters whose top affordability concern is not being able to afford housing, and the 16 percent who worry most about the cost of health care. Only 2 percent of voters report that their greatest affordability concern is taxes.
Anti-tax fervor is spreading in part because Americans can’t comprehend that kind of value proposition. We are not like Europe, where the sick can just walk into a hospital and get treated. Or like Japan, where everyone can travel by gleaming, efficient high-speed rail. Or like every other developed country, where the government provides paid maternity leave. And we’re not like any nation where those at the top pay their fair share.
In America, we pay taxes on salaries and wages. For normal people with normal jobs, that means paying taxes on everything they earn. But billionaires and centimillionaires live largely on investment income that taxes barely touch. Even the estate tax, meant to collect from the ultrawealthy at least once, at death, has been so gutted that Gary Cohn, the former director of the National Economic Council, is said to have declared “only morons” pay it.
Ordinary Americans are right to resent a tax system that’s skewed against them. There are a few limited efforts to correct the imbalance: California is debating a wealth tax, Washington State just signed into law a new tax rate for incomes over $1 million a year, and New York passed a new tax on luxury second homes in New York City. Just making those at the top pay their fair share won’t, however, be enough to get us where we need to be. And the remedy for a system in which some aren’t fulfilling their civic duty isn’t to decide that none of us should. Nor is it to create exemptions that are impossible to administer. (In an era when seemingly every credit card swipe asks consumers to add 20 percent more, exactly which industries should qualify for the exemption on tipping? How do we verify how much of a person’s income was from tips?) President Trump was right in his first term to advocate a simpler tax code. More narrow exemptions move us further from that worthy goal.
A century ago, the Supreme Court justice Oliver Wendell Holmes Jr. said that “taxes are what we pay for civilized society.” The reverse is true, too. Without taxes, society falls apart. Policymakers would do well to offer a vision of government that all constituents think is worth paying into, rather than racing to the bottom with tax cuts for all, which may feel expedient but ultimately undermine our capacity to build the society we deserve.
Natasha Sarin, a contributing Opinion writer, is a professor of law at Yale Law School. She is also the president and a founder of the Budget Lab at Yale and was a deputy assistant secretary for economic policy at the Treasury Department in the Biden administration and a counselor to Treasury Secretary Janet Yellen.
Source photograph by Peter Dazeley via Getty Images.
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