The Death of the Middle Class: Tax the Rich or Fix the System? What’s Really Causing America’s Wealth Gap | Tom Bilyeu Deep Dive

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As wealth inequality hits absolutely absurd levels, there have been increased calls to tax billionaires out of existence and get wealthy people to pay more. AOC wore a dress to the Met Gala that had "tax the rich" in blazing to cross it. In July of 2025, the three richest Americans, Elon Musk, Jeff Bezos, and Mark Zuckerberg, had a combined total of roughly 857 billion dollars and they owned more wealth than the entire bottom half of the US population combined, which is roughly 160 million people. But that's wealth, not income. It's potential, not reality. Taxing wealth would be like charging you for a flight that you might take one day to Paris. That's why tax has always been on income. Money you've actually made. The question though is, are the rich paying their fair share? Now, that question is complex. But the question isn't should the wealthy pay a lot. The answer is obviously yes. The question is, are they paying their fair share? It's so common for people to say that the riches don't pay taxes or that we could solve inequality by taxing the rich more. That it got me thinking, could we? Would it actually work? Do the wealthy pay their fair share? What story would the numbers tell? Honestly, I was shocked by what I found. I'm going to walk through the reality of what's going on in five easy parts. But the answer is very surprising and you are not going to want to skip part four because that's where the bodies are buried. All right, welcome to part one, follow the money. In 2021, the top 1% of American taxpayers paid more than $1 trillion in federal income taxes, nearly double the amount paid by the bottom 90% put together. Think about that. Fewer than one and a half million people collectively paid almost twice as much as well over 100 million other people combined. That statistic alone raises a question. What do people think is fair? Because wealthy people don't just pay more in taxes, paying more is a given. That's just how percentages work. 20% of 10 is 2, but 20% of 100 is 20. But US taxes are not a flat percentage for everyone. They're a progressive system. The more you make, the higher the actual percentage you pay. According to the Cato Institute, the top 1% earned about 22.4% of the income generated in the US. But they paid over 40% of all federal income taxes. In other words, if the income pie had 10 pieces, the wealthy earned two of the 10 pieces. But they pay for four of the 10 pieces. If you made $22 out of every 100, but were asked to pay $40 of every 100 in taxes, would you call that fair, excessive, or not nearly enough? Consider this. The bottom half of taxpayers only pay roughly 3 to 4% of their income in taxes. So while the top 1% pay roughly 26% of their income, the bottom half of taxpayers only pay 3 to 4% to put that in plain terms. The typical high earner sends about 26 cents of every dollar they earned to the federal government. Whereas the average taxpayer in the bottom half sends just a few pennies on every dollar they earn. That means according to taxfoundation.org, the wealthy carry a tax burden 7 to 8 times higher than the median American. What's more, according to the National Taxpayers Union, over 56 million individual tax returns had no federal income tax liability whatsoever. And many households even get money back due to refundable credits. Let's widen our focus out for a second to the top 10%. This group starts at roughly 178,000 in annual income per household. So it includes not just the CEO's tech founders and major asset holders people think of when they think of the 1%, but it also includes doctors, engineers, tradespeople, and small business owners. Collectively, these households earn about 49.4% of all income in America. And how much do they pay? A whopping 72% of all federal income taxes, according to the Cato Institute. Half of every dollar earned in the country comes from these families. But they don't pay half of the taxes. They pay almost 3/4 of every tax dollar generated. Their average income rate is about 27%, slightly higher than the top 1% rate. And I know for many, this number is still too low. Now, if that's you, if right now you're thinking, tax a more. Part five is going to be the part you're looking for, where we explain exactly what happens when you do that. But first, let's put this all together. The data of the top 20% of earners' challenges is simplistic narrative that the rich don't pay their fair share. The reality is the richest fifth of Americans pay the vast majority of all federal taxes and bear most of the corporate and payroll burden as well. When you zoom out to the top half of all taxpayers, you account for 97% of all taxes paid. All government programs, well 97% of them, are funded by the top 50% of earners. In other words, if you're even slightly above the median, you are part of the cohort carrying virtually all of the entire federal income tax load. On the other hand, effectively half of all adult Americans don't pay any tax at all. How much further do people want to push it? Do they want 20% to pay all the taxes? 10%? Guess what happens when you do that? We're going to cover that in more detail later. But before we move on, it's critical to say that just because the bottom 50%, only pay a ministerial amount of taxes. It does not mean that they're not working hard. They are. But the middle class is disappearing. The economy is indeed broken. It's just not broken in the way that people think. Here is the stark truth. Together, all of the households in the bottom 50% together only earned about 11.5% of all adjusted gross income in 2022. And that's down from an already horrific 14.4% in 2001. We are moving in the wrong direction. And the answer certainly isn't to tax the bottom half more. The answer is to ensure they're able to generate more income. This isn't about the top half working hard and the bottom half reloading, no matter what anybody tells you. This is about the breakdown of a system that can be seen nakedly in the distribution of taxes. Welcome to part two, the rise of populism and a country in trouble. Paris, 1793, radicals enraged by inequality, whipping up mobs to drag a guillotine through the streets. They promised justice for the common man, but instead created the infamous reign of terror that saw thousands of people beheaded, including the very revolutionaries who originally fed the fury. Beijing, 1966, after starving 45 million people to death by seizing the means of production to eliminate hierarchies, Mao launched the Cultural Revolution, meant to retain his iron grip on power when moderates in his own government called for market-based reforms. At Mao's urging, teenagers would pull teachers from classrooms and beat them, often times to death in public, within a decade, 36 million people had been persecuted, and another 1.5 million were dead. Cambodia, 1975, taking a page at a Mao's playbook, Pol Pot murdered his way towards a classless society where no one was unequal. Merely wearing glasses or speaking a foreign language could get you shot. Proving you really can equalize everyone if you're willing to equalize them in abject poverty. The Khmer Rouge killed about a quarter of Cambodia's total population. This is what happens when people actually decide to eat the rich. When inequality gets too high, the consequences really are dire. Saying that people aren't paying their fair share, when in fact they're paying way more than their share, is the beginning of a cycle of resentment that when left unchecked becomes absolutely murderous. The question becomes then, why do we instinctively target the group that already puts most of the bill? What is going so wrong? What is the psychology of resentment? And how does it perpetuate myths about wealth and inequality? Remember, inequality is as real as it gets. It is atrocious. Inequality right now is a crushing problem that must be addressed immediately. That's not the question. But the populist rhetoric pouring out of the mouths of politicians and TikTokers alike doesn't pose a real solution. The things being said aren't even accurate, so what is accurate? Think back to the last time you scrolled through your news feed or watch the viral video. What images stick in your mind? A friend on a gorgeous beach, a megyat gliding around turquoise waters, Elon Musk unveiling a rocket ship, Jeff Bezos stepping onto a private plane, people going into outer space. These spectacles are hard to ignore and our brains are wired to obsess over the gap between what we have and what they have. There's something called the Ginny Coefficient, and it has to do with animals disdain for inequality. If you want to know if things are going to get violent, just look at where you are on the Ginny Coefficient. It's a statistical measure of income and/or wealth inequality within a population, ranging from zero to one, or 0% to 100%. A value of zero indicates perfect equality. Everyone has the same income or wealth, while a value of one indicates perfect inequality. One person holds all income or wealth and others have none. For example, in the US, the Ginny Coefficient "For Income" inequality was approximately 0.41 in 2023, according to World Bank and Census Bureau data. Indicating moderate to high inequality compared to other developed nations, it was bad, but it's not insane. We'll be back in a moment. Every SIM card has a permanent ID. It's called an IMSI. 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With a journey coefficient around.85 for the US, reflecting the concentration of wealth among the richest individuals as seen with the 857 billion held by the top 3 billionaires again, Musk, Bezos, and Zuckerberg in 2025. The fact that our wealth inequality is so much higher than our income inequality is exactly the problem. We're going to discuss this in detail later, but for now suffice it to say that the distinction between the two matters a lot and virtually no one understands it. And that's the problem. This is exactly why we continue to find it impossible to solve this issue. In addition to the fact that people don't understand the difference between income, real money, and wealth, potential money, maybe somewhere down the line and what is causing the insane discrepancy between the haves and the have-nots when it comes to wealth, there are psychological factors at play that are building resentment. The first one is what psychologists call the availability heuristic. Namely, we judge how common or important something is based on how easily it comes to mind. Given that social media floods us with images of everybody doing better than us all day every day, it's easy to see why people are being conditioned to feel left behind even more than they're actually being left behind. Now again, people actually are being left behind for reasons we will go into in detail, but the rage is being accelerated by the availability heuristic and other psychological factors. The next cognitive trap that people fall into is known as zero-sum thinking. It's the instinctive belief that the economy is like a single finite pie. If someone takes a big slice, that means there's less left for everyone else. This mindset is deeply rooted in human evolution. In small tribes, resources really were finite. So one person's gain really did mean another person's loss, but applied to a complex growing economy that thinking just isn't true. You can hear zero-sum thinking in everyday conversations. Every dollar these billionaires hoard is a dollar somebody else doesn't have. Elon could have solved world hunger, but instead he bought Twitter. People actually believe that if the rich have more, it means the poor have less. What they miss is that's not how economies work. In reality, economies expand through innovation, investment, and increases in productivity. New wealth is literally created rather than taken from a fixed pie. Remember, wealth is potential money. The pie can always be made bigger. But it requires innovation. Yet because our brains default to zero-sum thinking, we interpret inequality as theft rather than recognizing that inequality is driven by value creation through assets, but assets aren't equally understood, so they're not equally owned, plus they're not created equally by different people. Now anyone could own assets or create them, but roughly 40% of Americans simply don't own any. They were never taught about assets in school, they were never taught about entrepreneurship, and right now the popular belief is simply that capitalists are evil. So people don't ask, how do I get on the winning side of capital? Even if I have very little money, it is possible, but nobody's asking how they do it. The third cognitive pitfall stems from an instinct that usually serves us well, the fairness heuristic. In most situations, we intuitively equate fairness with equal shares. If there are five cookies, for five kids, each child gets one cookie. Anything else feels unjust. The same impulse kicks in when we think about how much the top 1% owns. That any context or brain tells us that 1% of the people should probably own 1% of this stuff. When they own more, our fairness rate or screams, that's not fair. But as I like to say, you're arguing with God. For whatever reason, God, evolution, the universe, whatever you believe in, has seen fit to make humans different from each other. We all have different talents, and if economies grow through innovation and ownership, then the people who are most able to innovate and have an intellectual understanding of ownership, they're going to be the ones who end up with more of the pie. And every time throughout history, when we've tried to even everyone out and make sure that they were even outcomes, we have discovered very quickly that the only way is to kill a ton of people, but envy is a powerful emotion and truth just isn't going to get in its way. Psychologists have found that envy, not a desire for fairness or compassion for the poor, is what actually drives the desire to continue to tax the rich more and more. It comes from a desire to punish. In a cross-cultural study presented by the NIH, spanning the United States, the United Kingdom, India, and Israel researchers discovered that while compassion actually does predict generosity towards the poor, only envy predicts what the study showed, specifically that people will tax the rich, even when it hurts the poor. In the study, researchers presented participants with hypothetical scenarios involving wealth redistribution. Participants were asked to choose between A, a lower tax rate on the rich, let's call it 10%, which generates more overall resources that significantly benefit the poor, or B, a higher punitive tax rate, for example, 50%, which results in fewer overall resources, thus providing less benefit to the poor, but substantially reducing the wealth of the richest individuals. And guess what they found, across countries, people preferred the more punitive scenario, even though it offered fewer benefits to the poor, we as people are simply not wired to care about the poor. We're wired to want to punish the rich. This is why we struggle to actually solve this problem. People don't actually want the solution to inequality. As frontiers in.org noted, resentment is more than simple anger. Political scientists describe it as a hostile emotion, triggered not just from seeing others do well, but from believing that their success comes at your expense. Unlike anger, resentment carries a desire for retaliation. Imagine watching executives cash massive stock bonuses while your factory closes, or seeing tech billionaires well skyrocket during a pandemic that put you at a work, or bankers getting huge bonuses after being bailed out of a self-inflicted bank failure. Even if you know intellectually, that some of those fortunes came from innovation and hard work, resentment tells you that the playing field is rigged. It is not enough to level it. You want to flip it over. Resentment says they got rich at my expense, so it's only fair that we take some back. It is powerful fuel for a punitive tax system, because that would achieve not just wealth redistribution, but it would also serve to punish. And for most people, punishment is the desired outcome. Even if it hurts them and others in need financially. Resentment actually overrides self-interest. When wages stagnate and living costs soar, it's psychologically easier and more satisfying to blame the rich than to confront complex structural forces like debt, money printing, inflation, trade policy, and regulatory choices. Righteous anger at genuine unfairness rapidly becomes toxic resentment aimed at destroying the successful. And the problem accelerates. Welcome to part three. What actually drives inequality? Since the start of the pandemic, the US government has stolen 27% of its own people's money through the hidden tax known as inflation. Haters are going to say they didn't steal the money and technically they're correct. They stole your purchasing power, but I think people often hide the truth of what's happening behind technicalities and complexity. If you act as if inflation is theft of your money, you'll start making the right moves. Also, to make matters worse, since 2000, inflation-adjusted housing prices have risen about 65% while median household income has barely budged. But why? The answer is not what people expect. It's at printing money drives inflation and inflation drives asset prices up. Because smart money knows you have to get out of cash and hide in inflation-resistant assets, like houses, stocks, art, watches, et cetera. More people pour in and the prices go up. It's all gambling, but you have to do something to stop the government from stealing your purchasing power through inflation. So who ends up owning the assets that ride up on this inflationary policy? The top 10% of US households. They hold about 93% of all asset wealth while the bottom half own only roughly 1% of the market. If you're looking for a smoking gun, here it is. When the government borrows in prints money, inflation eats away at cash and wages. But assets, stocks, real estate, private businesses, et cetera, can surge in relative value. If you already own assets, you're so much shielded in from inflation. In fact, inflation can work for you. But if you don't own assets, you fall behind. Massively and rapidly. That is what kills the middle class. Now you throw in globalization, and the middle class is being squeezed from two sides. Global competition and automation on one side, and monetary policy and asset inflation on the other. During the first 22 months of the pandemic, a lone 70% of shareholder wealth gains went to the richest 5% of Americans. Not because they're evil, but because they're the ones that owned the assets that inflation drove up in value. These trends feed the sense that the system is rigged, and quite honestly, it is. Globalization made's good cheaper, but it also hollowed out the middle class and funneled wealth to those who already owned assets. Debt and regulation also added the mix. When government's finance deficits, they do so by taking on more debt via money printing. Debt at the government level dilutes the value of wages and savings. During the pandemic caused recession, the US printed a tsunami of dollars to help averted depression, but it also fueled the worst inflation in four decades. Prices for essentials like food, fuel, and housing shot up while nominal wages failed to keep pace. Excessive regulations also play a role in abyscerating the middle class. Layer upon layer of rules can stifle investment in productivity and innovation. And innovation and increases in productivity are huge drivers of wage increases without those wages don't increase. These drivers, excessive money printing, heavy regulation, runaway debt, interact with globalization to absolutely destroy the middle class. And how do the politicians in the voting public respond? Do they call for policy that addresses the underlying causes of this catastrophe? No, they respond with populism. Emotionally charged decision making where everyone joins a team and fights to destroy the other side who they view as an existential threat. They call for tax hikes on the rich, say, billionaires shouldn't exist or promise tax cuts with no plan other than more money printing to address the growing debt and freakish levels of wealth inequality. It doesn't matter what political side you're on. They're all part of the problem. And here's why these strategies are guaranteed to backfire. Welcome to part four, the danger of populist tax hikes and capital flight. In 2025, a record, 142,000 millionaires are expected to relocate internationally. The UK alone is projected to lose about 16,500 high net worth individuals, the largest net outflow of wealthy residents from any country ever recorded. That's not a trivial migration. And it forces all of us to confront a simple reality. Barring tyrannical force, wealthy people will flee any place that they view has a punitive tax policy. People seem to lose sight of the fact that nations are competing with each other for citizens. And favorable tax policies are one of the surest ways to draw the people that pay the most taxes. Drive the most innovation and create the most jobs. And let's not forget, the wealthy pay to vast majority of taxes. So whatever country attracts the most wealthy people has the most tax dollars to spend. But none of that stops people from pushing for policies that do the exact opposite. Let's step back and ask. Why exactly are wealthy people fleeing the UK? The UK used to roll out the red carpet for global elites. But now they're letting them in only to pick their pockets. A financial express report notes that the abolition of Britain's non-domicile tax regime, which previously allowed foreign residents to shelter overseas income, has made the country one of the most expensive places to live. After April 6, 2025, long-term residents must now pay UK taxes on worldwide income and gains. With top income tax rates of 45%, capital gains taxes up to 24%, and a 40% inheritance tax on global assets. London's labor government budget also raised taxes on wealthy foreigners and eliminated provisions protecting overseas earnings and estates. These changes come atop already existing steep burdens from council taxes, road levies, and emission-free zones to a whole slew of other things that make the UK uniquely hostile to high earners. Add in a sluggish stock market that has underperformed the US and Asia for years, as well as a complex regulatory environment. And it's easy to see why the country is absolutely bleeding wealth. Henley and partners puts it bluntly. For the first time, since it began tracking millionaire migration, a European nation leads the world in millionaire outflows. All of this is insane. If you have any context whatsoever, and history tells us, it will lead to the UK actually collecting less tax revenue. But remember, this isn't about collecting more taxes. It's about being punitive. It's not about helping the poor. We're already seeing this play out. Britain, once the crown jewel of global finance, is now losing its most productive citizens. It's the only major wealth hub with shrinking numbers of high net worth residents, even as the US, Switzerland, and the UAE attract record inflows. This contrast underscores a simple but powerful point. Capital and talent go where they are treated well. Countries that combine opportunity with reasonable tax and regulatory burdens attract entrepreneurs and investors. Those that punish success, whether out of fiscal desperation or populist resentment, risk driving away the very people who create jobs and fund public services. The US is currently benefiting from that calculus, but with increased calls to tax the rich, even more, the question is whether it will continue to do so. America should take heed of what's going on in the UK. Today, the US is poised to gain 7,500 millionaires, according to Henley Global. But if we succumb to the same politics of envy, if we raise capital gains rates to European levels and pose well taxes or scrap longstanding incentives for investment, we could flip from magnet to repellent almost overnight. In fact, we've already tried punishing levels of tax before, and it didn't work. In the 1950s, as a result of World War II, America had a marginal tax rate of over 90%. You would think that would bring in so much more revenue, but the fact is, we took in less tax revenue per taxpayer than we take in right now. That's correct. With a 90 plus percent progressive tax policy, the kind like people are calling for right now, and we took in less money per taxpayer than we take in currently with a much lower rate. Now, this is something known as the Laffer Curve. The Laffer Curve is an economic concept that illustrates the relationship between tax rates and actual tax revenue. It shows there is an optimal tax rate that maximizes government revenue, and if you go beyond that, you're doing it out of spite because increasing the tax rates above that number serves only to reduce revenue by discouraging economic activity, such as work, investment, or even consumption. It also makes the wealthy flee the country or state as previously discussed. History shows, over and over again, that attempting to eliminate inequality through punishing taxation of the rich erodes the very foundations of prosperity. So if tax alone doesn't work, what is the solution? Because the level of inequality that we have right now must be fixed for everyone's sake. Holtite, we're going to take a quick break. Let's talk about a lie that you've been sold. Most people think expensive clothing equals quality. They are wrong. You're paying for middlemen. You're paying for brand markup. You're paying for everything except the actual materials and craftsmanship. That cashmere sweater with a $400 price tag costs a fraction of that to make. The rest is profit margins stacked on profit margin. Quince eliminates that entire system. They work directly with top factories. No middlemen, no inflated retail markup, just premium materials at actual cost. I got a cashmere sweater that is softer than anything that I've paid triple for. Refresh your wardrobe with quince. Go to quince.com/impactpod for free shipping on your order in 365 day returns, now available in Canada too. It's spelled Q-U-I-N-C-E dot com slash impact pod free shipping and 365 day returns. Quince dot com slash impact pod. All right, we're back. Let's get into it. Welcome to part five. How do we fix the problem? America's national debt is now bigger than the entire economy. If we allocated every cent of GDP we generate in an entire year to the debt, we'd still owe almost $10 trillion. Our debt is on track to exceed its World War II era record within just a few years. With interest payments totaling more than the annual budget for national defense, those numbers aren't abstract. They mean less money for schools, less money for roads, less money for research, less money for everything. But before we can fix the problem, we have to agree on what the problem is. The symptom is obvious, intolerable inequality. That is what we have to change. If we don't fix inequality, we are guaranteed to have a future that includes revolution or civil war. Our future is only bloodshed if we don't solve the inequality problem. But while the symptom is obvious, the problem is far more elusive. What's actually causing it? I routinely get into base with people about wealth and equality. And I am shocked how often people come back to the solution being to tax the rich. That's what made me want to write this video essay in the first place. I'd be all for it if it were going to actually solve the problem. I'd much rather be tax more than I am now than how my body is separated from my head. But the reality is that increasing the tax policy alone will tank the economy, making everything worse. We have to face the hard truth. Wealth and equality is a runaway train due to globalism and the realities of how economies work. The following oversimplifies a problem, but not by much. When the government racks up debt, it has to print money to make its payments. Printing money causes inflation. Inflation destroys anyone who gets paid in cash or saves in cash, and it rewards anyone who owns a smart basket of assets. The research suggests there are a few large forces at work and while none alone account for everything, a small number of factors accounts for the overwhelming majority of the problem. If you've ignored everything I've said up till now, please pay attention to this because here is a breakdown. Number one, globalization and offshoring. Economists who studied the China shock, letting China into the WTO, found that increased import competition from China caused nearly 60% of all US manufacturing job losses between 2001 and 2019. From 2000 to 2007 alone, the shock wiped out a staggering 1.5 to 2 million manufacturing jobs. Those losses didn't simply shift workers into equally good jobs. The vast majority of those workers remained permanently unemployed and the ones that did find work, largely found lower paying service jobs. While people often point to a growing chasm between executive compensation and labor wages, the Brookings Institute points out this is actually a problem of globalism. The offshoring of the more labor intensive parts of the US supply chains explains the majority of the drop in the labor share of income. The report went on to highlight that the evidence for other neoclassical explanations for the drop such as a softening of union negotiating power is weak at best. Two, the changing labor capital split and worker power. According to the Brookings Institute, researchers found limited support for neoclassical capital-deepening explanations and noted that labor share of national income has only fallen by about 6 percentage points since the mid-1980s, from roughly 64% to about 58%. Their study also notes that about a third of that decline is due to statistical quirks and how self-employment income is computed, and that most of the rest stems from within industry declines in manufacturing and trade rather than a simple shift of profits from labor to executives. Additionally, when you factor benefits into total compensation, wages actually held steady with productivity increases until the 2000s when the problems of globalization and runaway inflation began a serious downward trend. That's not to say that unions in minimum wage policy doesn't matter, it does, but their aggregate impact is modest at best. A study summarized by the US Bureau of Labor Statistics found that unions reduce economy-wide wage inequality by less than 10%. And in the private sector, it effectively doesn't matter, accounting for only about 1.5 percentage points for men and 0.6 points for women. The Clining Union membership and the eroded real minimum wage do contribute to the problem, but they don't explain the vast majority of the gap. For that, we have to talk about the elephant in the room. Three, how debt financed money printing creates asset inflation. To fund our chronic deficits and stimulate our economy even more since 2008, the Federal Reserve has increased the money supply wildly. From 2020 to 2021 alone, the Fed increased the money supply by an unforgivable 27%. That's much more than the money supply was increased for the Great Depression in World War II. This surge helped avert immediate economic collapse but fueled the highest inflation in 40 years, absolutely obliterating the middle class. Nominal wages failed to keep up for the reasons previously mentioned, eroding the purchasing power of anyone who didn't own assets. There's no way around that, I wish there was. I wish it wasn't this complicated, but that is the reality. If we're going to claw our way out from under, the terrifying specter of debt and inflation, we must realize that inflation helps those who own appreciating assets while hurting anyone who doesn't. That is the problem. According to the US Treasury, since 2000, inflation-adjusted housing prices have climbed about 65% while median household income has barely moved. Stock market gains have been even more lopsided. The top 10% of Americans now hold 93% of all US equities while the bottom 50% as we talked about hold just 1%. The top 1% alone on over $16 trillion in stocks, whereas the bottom half hold 0.3 trillion. As a result, asset price inflation has widened the wealth gap to terrifying levels. Even if wage growth had kept keeping pace with productivity, those without assets such as stocks, crypto, gold, or a house would get left behind no matter what. That's the problem with the resentment. It makes people emotional and stops them from focusing on the actual cause and effect that's gotten us here. So what should people focus on? Well, according to statistical evidence presented by the Heritage Foundation, reducing regulations can actually unleash economic growth. The data shows that even simply not allowing any new regulation, forget reducing them, just not allowing any new regulations, would increase GDP by nearly 2% over 10 years. Guys, that would roughly double our GDP and would put us squarely in the middle of an extraordinary economic boom. Their data also suggests that this would allow us to trim inflation by 0.6 percentage points annually, which would free up billions of dollars that currently go to interest payments on the debt. And that would be small potatoes compared to a balanced budget, ending deficit spending, and never allowing the government's take on debt in excess of 3% of GDP. Also, according to the National Institute of Standards and Technology, each dollar invested in US manufacturing generates $2.69 in total economic activity. We have to accept that by allowing China into the WTO, teaching them all of our high-skill manufacturing techniques, and all of our VC capital allocation techniques, we've created a pure competitor that can now rival us militarily and economically. We have to be realistic about the threat they pose, and onshore, essential, and high-skill, future-facing manufacturing. We also have to ensure a pro-well tax code so that we can be competitive on the world stage for top-tier talent, even if you hate migrants. You have to remember that just because someone was born here doesn't mean they're going to stay here if we create a confiscatory tax policy. And one last thing, and this is a big one, we have to stop money printing. This is the Assassin's bullet for the middle class. All right, you put it all together, and you see the tools to grow the economy and reduce inequality exist, but they require discipline and a willingness to rethink our approach. They also require us to get out from under the massive debt that we've accumulated, which is currently enslaving all future generations. And to do that, we'll need to execute a beautiful deleverging. Now, I've done a full video that you can watch here about that exact thing. Remember, fewer than 1.5 million Americans, roughly the population of Phoenix, pay almost twice as much in federal income tax, as the other 137 million taxpayers combined. Now imagine those same people looking at headlines that call them free loaders that say that they're not paying their share. Imagine them watching London chase out its wealthiest residents with punitive taxes, then they themselves packing up and leaving. It always seems impossible until it happens, as it has many times throughout history. As it is happening, right now, in Europe, in unparalleled fashion, that doesn't mean that inequality isn't grotesque and unacceptably high. It is, and I hope I've made that clear here today. But our goal should be to fix the broken system, not get caught up in the emotions of punitive populist rhetoric that's based on resentment rather than an actual desire to change that will help those that are struggling. Helping those that are struggling should be the goal. The yawning gap between the rich and the poor isn't because the rich dodge taxes. It's because globalization sent factory jobs overseas. The government took on an insane amount of debt and printed an absurd amount of money. And that in turn inflated asset prices like mad. That sent asset owners into the upper class and non-asset owners down into the lower class. Failed economic policies have gotten us into this mess. And no matter how hard they are to fix, if we don't fix the real problems, then economic stagnation or catastrophe are the only options left on the table. History screams its warning. Actions taken out of envy lead to guillotine civil wars and genocides. They are a cure that is far worse than the disease. It's how France elected a dictator, Spain elected a dictator, Italy elected a dictator, and most memorable of all, how Germany elected a dictator. If we let resentment for the rich strangle another generation's ambition in the crib, we will lose to China. See our millionaires flee as they are from the UK and will spend 100 years as a former economic superpower just as Argentina did for the exact same reason. We need to channel our anger towards solutions, not scapegoats. We need to cut the red tape that holds back entrepreneurs. We need to bring back critical manufacturing and we need to balance the budget and stop electing people who promise things for free. Nothing but failure comes for free. As is true the world over, America's prosperity has always come from growing the pie rather than slicing it thinner. So let's remind ourselves of how we became the most dominant economy the world has ever seen and get back to solutions that survive contact with the real world. All right, guys, if you want to join me as I explore these ideas in real time and have your own voice heard or simply listen to the debate, make sure you join me during my live streams here on YouTube, Wednesday and Friday at 6am Pacific. Until then, my friends, be legendary. Take care. Peace.