There Are Not Enough Rich People to Finance Big Government

Leftists should be nice to rich people people because those entrepreneurs, investors, and business owners are the ones financing the federal government.

However, there are too few rich people to finance a European-sized welfare state.

The above video is a segment from a recent presentation to the Money Show, in which I explained that lower-income and middle-class taxpayers are going to get hit by massive future tax increases.

There are two inescapable reasons for this conclusion.

First, entitlement spending is exploding and, second, there are not enough rich people to pick up the tab. As such, you can’t finance a large welfare state without pillaging ordinary people.

You can’t do it if your name is Joe Biden.

You can’t do it if your name is Donald Trump.

But not everyone believes me

And that’s why I shared the charts in the video. The numbers clearly show that taxes on the rich will not suffice.

• There are not enough rich people to finance the current level of government spending.
• There are not enough rich people to finance future levels of government spending.
• There are not enough rich people to finance the new spending Biden is proposing.

Perhaps the strongest evidence is that even Bernie Sanders recognizes this reality. He favors every possible class-warfare tax increase, but it’s very revealing that he also proposed a massive 11.5 percent payroll tax on the wages of everyone to finance his plan for “free” government-run healthcare.

By the way, let me add one very important point that I didn’t make in the video. I’m sure folks on the left will go for class-warfare tax increases before going after the rest of us.

And if they succeed in enacting those tax increases, we can be very confident of terrible economic consequences. It will be the reverse of Reagan’s very successful approach, which actually led to dramatic increases in tax payments from upper-income taxpayers.