If we are going to reduce the deficits without massive cuts, the revenue is going to come from the middle class. The top 10% of earners already pay around 72% of income taxes. That's a little skewed because it doesn't take into account that workers pay an approximately 15% flat tax on their first $185k or whatever the cap is now. But of course assuming we honor the current SS formula, they also get screwed much less by social security.
But I also don't know that it is a regressive tax on the whole. If they are stable and predictable (which obviously they are not right now but they could become that over time), I think you would expect everybody to be poorer over time but lower skilled workers would get an offsetting relative increase in income because of less competition from third world workers. Not sure about the right way to think about it, but if you look at just revenue raised, it probably looks something like a flat tax, with richer people paying more because they consume more, but if you look at the cost of the tariff overall, including lost trade opportunities and being poorer overall, I think the affluent will bear that cost more so than the lower and middle income workers.
I think this is an example of voters getting what they deserve. Neither the GOP or the dems care about deficits because voters don't care about deficits. Voters want to be lied to and told that it can be fixed without touching social security, medicare, defense, or any spending they have a particular interest in and without people like them being taxed.
While voters as a whole don't care, I do think there are enough wealthy people that don't want to see everything turned upside down in what is essentially a sovereign debt crisis that they are starting to put real pressure on cutting at least the waste and ridiculous spending. And that will help. It's pretty disgusting watch people defend wasteful spending by saying it's only a billion dollars so there's no point in cutting it. But if you exclude automatic spending on things like social security, medicare, and interest on debt, we basically have to cut half of what's left to get the deficit down to 3% of GDP, which is still probably large enough to cause problems long term, but if you just reduced the regulatory burden, which is estimated to be a bigger drag than taxes on the economy, you could probably get enough growth to start slowly reducing debt in real dollars if not nominal dollars.
Everybody that plans on getting social security or medicare or doesn't want our defense budget slashed should be cheering for DOGE and giving them a lot of political support. If we can't make a huge dent in federal spending buy eliminating waste and fraud and saving money by modernizing government operations, it's basically going to be middle class tax increases or SS and medicare cuts to solve the problem, or it's going to be an inflationary crisis.
