The United States is approaching a fiscal breaking point, with the national debt nearing $38 trillion. Addressing this challenge is difficult not because solutions don’t exist, but because many of the most politically appealing proposals move in the wrong direction.  The government’s current revenue structure is already insufficient to keep pace with long-term obligations. Instead of strengthening it, many recent political proposals emphasize tax relief, including policies such as “No Tax on Tips,” “No Tax on Overtime,” or “No Tax on Social Security.” While these policies may sound appealing to working and middle-class Americans in the short term, they ultimately deepen the federal government’s long-term fiscal strain. The United States cannot afford to eliminate additional sources of revenue while its obligations continue to grow.

The stakes of this fiscal imbalance are significant. According to the Committee for a Responsible Federal Budget, the Social Security trust fund is projected to become insolvent by 2032, triggering automatic benefit cuts of approximately 24 percent. For millions of Americans, Social Security is not supplemental income—it is essential. Such a reduction would be catastrophic for millions of Americans who rely on these benefits as a primary source of income to meet basic needs. 

For this reason, Congress should consider reforms that strengthen existing forms of taxation rather than eliminate them. One option is to update and expand the federal estate tax. In September of 1789, Thomas Jefferson wrote in a letter to James Madison that “the earth belongs in usufruct to the living: that the dead have neither powers nor rights over it.”  This principle reflects a modern reality: a tax system that allows large concentrations of wealth to pass largely untaxed across generations undermines both fairness and fiscal sustainability.

Although the estate tax was designed to prevent the indefinite accumulation of untaxed wealth, it currently contributes less than one percent of federal revenue. Members of Congress frequently argue that the estate tax should be eliminated because they believe it represents double taxation or harms family farmers and small businesses. However, the original logic of the estate tax was to complement the income tax by ensuring that wealth eventually enters the tax base. This assumption worked when most wealth was generated through taxable income. 

Today, however, there is an important distinction between high income earners and high wealth holders. Individuals with high income typically pay taxes according to the income tax code. Wealth holders, by contrast, often accumulate assets that increase in value but are not taxed until they are sold. This allows vast amounts of wealth to grow outside the taxable system entirely.

A well-known example illustrates this dynamic. In 2011, Jeff Bezos, the founder of Amazon, was eligible to claim the $4,000 child tax credit because the law limited eligibility to individuals earning less than $100,000 in income. At the time, Bezos’s net worth was approximately 18 billion dollars. However, because most of that wealth was held in stocks, it counted as unrealized capital gains rather than taxable income. Since assets are generally not taxed until they are sold, Bezos reportedly paid no federal income tax that year while still qualifying for a benefit designed for far lower-income households. 

The original goals of the income tax and the estate tax were reasonable and effective in their time. However, the structure of wealth accumulation in the modern economy has changed significantly, while the estate tax has not been meaningfully updated since the 1990s. If policymakers want to address

long-term fiscal pressures and ensure that the tax system functions as intended, Congress must modernize the tax code and reexamine the role of the estate tax in capturing wealth that currently escapes taxation and ensuring that the system reflects today’s economic realities—not those of the past.

References

Andrew Lundeen. 2015. “The Estate Tax Provides Less than One Percent of Federal Revenue.” Tax Foundation. April 7, 2015. 

https://taxfoundation.org/blog/estate-tax-provides-less-one-percent-federal-revenue/. 

Committee for a Responsible Federal Budget. 2025. “OBBBA Would Accelerate Social Security & Medicare Insolvency | Committee for a Responsible Federal Budget.” Crfb.org. June 27, 2025. https://www.crfb.org/blogs/obbba-would-accelerate-social-security-medicare-insolvency. 

Congressional Budget Office. 2026. “The Budget and Economic Outlook: 2026 to 2036.” Cbo.gov. Congressional Budget Office. 

https://www.cbo.gov/system/files/2026-02/61882-Outlook-2026.pdf. 

Glenn, Karen. 2025. “THE 2025 ANNUAL REPORT of the BOARD of TRUSTEES of the FEDERAL OLD-AGE and SURVIVORS INSURANCE and FEDERAL DISABILITY INSURANCE TRUST FUNDS COMMUNICATION from the BOARD of TRUSTEES, FEDERAL OLD-AGE and SURVIVORS INSURANCE and FEDERAL DISABILITY INSURANCE TRUST FUNDS TRANSMITTING the 2025 ANNUAL REPORT of the BOARD of TRUSTEES of the FEDERAL OLD-AGE and SURVIVORS INSURANCE and FEDERAL DISABILITY INSURANCE TRUST FUNDS.” 

https://www.ssa.gov/OACT/TR/2025/tr2025.pdf. 

Internal Revenue Service. 2025. “Estate Tax | Internal Revenue Service.” Irs.gov. December 22, 2025. https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax. 

National Archives. 1789. “Founders Online: To James Madison from Thomas Jefferson, 6 September 1789.” Founders.archives.gov. September 6, 1789. 

https://founders.archives.gov/documents/Madison/01-12-02-0248. 

Simon, Scott. 2021. “Opinion: On Claiming the Child Tax Credit.” NPR.org, June 12, 2021. https://www.npr.org/2021/06/12/1005758347/opinion-on-claiming-the-child-tax-credit. 

US Treasury. 2025. “What Is the National Debt?” Fiscaldata.treasury.gov. 2025. https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/.