How To Subdue the Federal Government Leviathan in 2025

COMMENTARY Taxes

How To Subdue the Federal Government Leviathan in 2025

Jul 16, 2024 4 min read
COMMENTARY BY
Preston Brashers

Research Fellow, Tax Policy

Preston is a Research Fellow for tax policy in The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget.
the federal government should have no place dictating which everyday products people can and can’t buy, whether it’s gas stoves, gasoline-powered cars, or dishwashers. Jakub Porzycki / NurPhoto / Getty Images

Key Takeaways

People already spend more than $400 billion per month feeding the federal government with their tax dollars. That’s about $3,100 per household. Each month!

The federal government is too big, too powerful, and exerts itself too much in people’s daily lives through taxes, spending, and regulations.

Cutting the government down to size would be a good thing in its own right, but it would also help ensure that people avoid higher taxes.

You can’t spell “federal government” without the word “fed.” And this leviathan demands to be fed. A lot.

The government’s appetite has only grown over the past four years. Congress and the next presidential administration must prioritize subduing the government and halting its growth in the years to come.

People already spend more than $400 billion per month feeding the federal government with their tax dollars. That’s about $3,100 per household. Each month!

But the government is not content with what it gets from taxes. It also uses the national credit card, saddling taxpayers with about $160 billion of new debt per month. All told, the federal government gobbles up about $4,300 per household every month.

That is one gigantic mouth to feed. It makes families’ $500 grocery store excursions seem cheap by comparison.

>>> Five Rules for Fiscally Responsible, Pro-Growth Tax Reform

The burdensome economic conditions people find themselves facing today are a direct result of the government’s recklessness. Everything is less affordable because the federal government printed too many dollars to satiate its appetite for more spending, diluting people’s purchasing power. The amount of money floating around the economy swelled by 36% since 2020, and prices predictably skyrocketed.

The more the government gorges itself, the more people must pay, whether through taxes or inflation.

It is impossible to list all the new spending enacted over the past few years. Between March 2020 and December 2022 alone, Congress passed an incredible $7.5 trillion in new nondefense spending. That’s not including baseline annual appropriations—just new spending.

These spending packages have pleasant enough sounding titles: the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the American Rescue Plan (COVID Stimulus Package), the Infrastructure Investment and Jobs Act, the Inflation Reduction Act (IRA). But it’s all downhill after the title.

They have hired more bureaucrats; expanded the IRS; given bonuses to government employees; provided social justice grants; increased welfare; bailed out unions, airlines, and people with student loan debt; subsidized electric vehicles and green energy; and, of course, the flow of all this federal money opened the door to hundreds of billions of dollars of fraud.

The federal government is too big, too powerful, and exerts itself too much in people’s daily lives through taxes, spending, and regulations. Whatever anyone says, the federal government should have no place dictating which everyday products people can and can’t buy, whether it’s gas stoves, gasoline-powered cars, or dishwashers.

The next Congress and presidential administration can not take back the money that has already gone out the door. But right out of the gates, they should rescind unobligated funds from the COVID-19 slush fund. And yes, this is a reminder that we are still paying for government pet projects under the auspices of the pandemic recovery!

The next Congress and administration should repeal regressive tax credits for electric vehicles, higher education, and green energy boondoggles.

They should bring nondefense discretionary appropriations back down to the level they were in 2022, or better yet, 2019, and cap the annual growth thereafter.

They should move more spending from mandatory to discretionary to get the U.S.  off autopilot to a future debt crisis.

They should reduce regulatory overreach by requiring federal agencies to receive legislative approval for major new rules. Unelected bureaucrats are given almost free rein to impose regulations on people in their agencies’ respective areas.

>>> Washington’s Reckless, Bipartisan Deficit Extremism

And the next Congress and administration should outright eliminate federal agencies and offices that cause more harm than good. A great place to start would be to shut down the Department of Education and move everything back to the states where it belongs. Does anyone think the U.S. educational system has improved since 1979 when then-President Jimmy Carter created the agency?

Cutting the government down to size would be a good thing in its own right, but it would also help ensure that people avoid higher taxes. Major tax hikes on almost everyone will take effect in January 2026 unless lawmakers pass legislation to extend the expiring 2017 tax cuts or pass an alternative reform.

Lawmakers grappling with the tax code in 2025 should prioritize the permanent extension of expensing provisions to ensure that business investments in machinery, equipment, and research and development do not face punitive treatment. And to avoid tax rate hikes, lawmakers should eliminate special carve-outs in the tax code that favor specific industries or encourage more government spending, including business tax credits, the state and local tax deduction, and the tax exemption for municipal bond interest.

Ultimately, the only way for people to avoid much higher taxes now and in the future, unless lawmakers are comfortable with printing more money and sparking more inflation, is if the federal government shrinks and the rest of the economy grows.

America must subdue this leviathan, or it will consume America.

This piece originally appeared in Restoring America by the Washington Examiner

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