Don’t go after the rich to fix broken budgets
The Economist
February 19, 2026
AI-Generated Deep Dive Summary
Politicians often look to the wealthy as a solution for fixing broken budgets, proposing higher taxes on the top 1% who already account for a significant portion of income and federal tax contributions. While the wealthiest individuals may seem like an easy target, this approach is both ineffective and morally questionable, according to critics. The article argues that increasing taxes on the rich does not address the root causes of budgetary issues and could have unintended consequences for economic growth.
In recent years, there has been a growing push to implement new tax measures targeting high-income earners in various regions. For instance, New York City’s mayor has proposed a 2% levy on incomes over $1 million, while states like Virginia, Rhode Island, and Washington are considering similar policies. In Europe, countries such as France have seen strong movements advocating for wealth taxes, and the UK may follow suit under political pressure from its left wing. These proposals reflect a broader trend of public and political sentiment favoring increased taxation on the wealthy.
However, critics argue that taxing the rich more heavily is not a viable solution to budgetary problems. The top 1% already contribute nearly a third of federal taxes in the U.S., despite earning only about a fifth of total income. While these individuals have the means to pay more, doing so could harm economic growth by discouraging investment, innovation, and job creation. Additionally, relying on the wealthy to fix budget gaps ignores systemic issues such as excessive government spending or inefficiencies in tax collection.
From a business perspective, this issue matters because high taxes on the wealthy can directly impact entrepreneurs, investors, and corporate leaders who drive economic progress. When taxes rise, these individuals may scale back on reinvestment, hiring, or innovation—activities that are
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Originally published on The Economist on 2/19/2026