The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, was heralded as a positive bill because it increased the progressivity of our tax system. But what does “progressive” really mean? It’s crucial to understand: progressive taxation means higher-income earners not only pay more taxes due to their larger income but also face exponentially higher rates on that income—evidenced by the top 50% paying 97% of federal income taxes in 2022, per the Tax Foundation’s recent article by William McBride, whom I greatly respect. While some view this as beneficial to lower-income earners by targeting the wealthy, it’s undeniably a burden on growth, as those high earners are responsible for driving economic expansion. Our system’s extreme progressivity, with 47% of “taxpayers” paying no income tax, further distorts this, creating a false sense of contribution while dragging down the economy that lifts all incomes.
This OBBBA was viewed as a win because it made the tax code more progressive, but as we discussed, not only is progressivity not beneficial, the details make it even worse. The Tax Foundation’s analysis, led by McBride, provides a solid foundation, and I commend their clarity. However, specific provisions like no tax on tips and overtime, while reducing taxes for some earners, make it worse for others by distorting market efficiency, and the expanded child tax credit, though politically popular, encourages non-work and balloons the deficit. As a libertarian tax expert with decades of small business experience, I see this as overreach—specifically, no tax on tips, no tax on overtime, and the child tax credit—causing economic detriment as well as adding burdens to future generations through rising debt.
The solution lies in a streamlined flat-tax system to replace this convoluted maze of credits and deductions. The Tax Foundation’s data, highlighted by McBride’s analysis, reveals the damage caused by such progressivity—stifling growth and entangling the tax code with enormous complications. With 2026 tax planning underway, taxpayers are now having to deal with the enormous complications added by the tax law changes, which reduce growth in the economy and create uncertainty. People are being forced to take time away from their business pursuits to deal with these useless anti-growth provisions, figuring out how to plan with them and grappling with the fact that they sunset, further complicating their efforts.
Share your views—let’s push back against this damaging trend illuminated by McBride’s insights and build a freer, stronger fiscal future!