![1040 Tax Form and Calculator](/sites/cato.org/files/styles/optimized/public/2021-01/GettyImages-1221037976.jpg?itok=4NC0-uSS) # Tax and Budget Policy At a Glance Cato scholars examine federal, state, and local spending and tax issues from a limited government perspective. They explore the benefits of lower-rate tax systems, the distortions caused by government spending, and the dangers of rising debt. A guiding principle for budget policy is federalism, the idea that federal activities should be limited and that most government activities are better handled by the states. Join the Conversation [\#CatoEcon](https://x.com/hashtag/CatoEcon) Share This Topic #### Featured Content [![taxes](/sites/cato.org/files/styles/content_teaser/public/2026-08/GettyImages-1472045515.jpg?itok=vg8P_dhf)](https://www.cato.org/briefing-paper/flat-tax-advantage) Study ## [The Flat Tax Advantage](/briefing-paper/flat-tax-advantage) By [Adam N. Michel](https://www.cato.org/people/adam-n-michel) Flat-tax states grow faster, report higher incomes, see better fiscal outcomes, and protect taxpayers from rate hikes. [![A payroll tax hike chart](/sites/cato.org/files/styles/content_teaser/public/2026-09/Screenshot%202026-09-14%20at%2018.43.32.png?itok=ETKqf5vg)](https://www.cato.org/blog/what-would-social-security-payroll-tax-hike-cost-you) blog ### [What Would a Social Security Payroll Tax Hike Cost You?](/blog/what-would-social-security-payroll-tax-hike-cost-you) By [Romina Boccia](https://www.cato.org/people/romina-boccia) Rather than requiring younger Americans to surrender more of their paychecks to finance growing payments to affluent retirees, Congress should refocus Social Security on protecting seniors from poverty. Gradually slowing benefit growth for higher-income retirees would preserve reliable support for vulnerable Americans while putting the program on a more sustainable fiscal path. [![Taxes, Congress](/sites/cato.org/files/styles/content_teaser/public/2025-01/taxes%20congress%20Cropped.jpg?itok=SH6ByJNN)](https://www.cato.org/blog/reconciliation-30-must-be-vehicle-deficit-reduction-not-partisan-appropriations) blog ### [Reconciliation 3.0 Must Be a Vehicle for Deficit Reduction, Not Partisan Appropriations](/blog/reconciliation-30-must-be-vehicle-deficit-reduction-not-partisan-appropriations) By [David Ditch](https://www.cato.org/people/david-ditch) For the sake of the nation’s current and long-term economic health, Congress must turn Reconciliation 3.0 into a vehicle for reform rather than just another partisan spending binge. [![data center](/sites/cato.org/files/styles/content_teaser/public/2026-08/GettyImages-1073009100.jpg?itok=QHcT1Ung)](https://www.cato.org/blog/not-all-data-center-tax-breaks-are-subsidies) blog ### [Not All Data Center Tax Breaks Are Subsidies](/blog/not-all-data-center-tax-breaks-are-subsidies) By [Adam N. Michel](https://www.cato.org/people/adam-n-michel) Generally available policies, such as sales tax exemptions for business inputs, are not subsidies; rather, they move the tax code toward a more neutral tax base. [![Cato Weekly Podcast Episode 1 Title Card](/sites/cato.org/files/styles/content_teaser/public/2026-09/CW%20EP%2001.png?itok=wpiTlIQM)](https://www.cato.org/multimedia/cato-weekly-podcast/how-much-would-dsas-agenda-cost) Cato Weekly Podcast ### [How Much Would the DSA’s Agenda Cost? ](/multimedia/cato-weekly-podcast/how-much-would-dsas-agenda-cost) Featuring [Rikki Schlott](https://www.cato.org/people/rikki-schlott) and [Adam N. Michel](https://www.cato.org/people/adam-n-michel) Free health care, housing, college, paid leave, and retirement benefits may sound appealing… but how would we pay for them? Rikki Schlott sits down with Cato’s Adam Michel to unpack the Democratic Socialists of America’s ambitious agenda and the staggering cost of its proposals. If taxing the rich and corporations is not enough to foot the bill, who would be paying next? [View More Related Content](/search/topic/11) [![Social Security’s Trust Fund Promo - Piggy Bank with Fishing Hook](/sites/cato.org/files/styles/promo_block/public/2025-10/piggybank.jpg?itok=LdS-xD5s)](https://www.cato.org/visual-feature/social-securitys-financial-crisis) ##### Visual Feature ### [Social Security’s Financial Crisis: The Trust Fund Myth Uncovered](https://www.cato.org/visual-feature/social-securitys-financial-crisis) Most people misunderstand the Social Security trust fund. They believe it holds real financial assets that ensure future benefits—the equivalent of a piggy bank stuffed with dollar bills. But there’s a big problem: *the piggy bank is empty.* Learn more in our latest interactive visual feature. [Read More](/visual-feature/social-securitys-financial-crisis) #### Meet Our Experts [![Romina-Boccia-cropped2.jpg](/sites/cato.org/files/styles/bio_picture_mobile/public/2022-09/Romina-Boccia-cropped2.jpg?itok=JFTKLQrg)](/people/romina-boccia) ##### [Romina Boccia](/people/romina-boccia) Director of Budget and Entitlement Policy [![Ryan Bourne](/sites/cato.org/files/styles/bio_picture_mobile/public/2021-01/Ryan%20Bourne.jpg?itok=dnTzPmPS)](/people/ryan-bourne) ##### [Ryan Bourne](/people/ryan-bourne) R. Evan Scharf Chair for the Public Understanding of Economics [![Krit Chanwong Cropped](/sites/cato.org/files/styles/bio_picture_mobile/public/2025-07/Krit%20Chanwong.png?itok=MFo06-NI)](/people/krit-chanwong) ##### [Krit Chanwong](/people/krit-chanwong) Quantitative Analyst [![tad_dehaven_cropped](/sites/cato.org/files/styles/bio_picture_mobile/public/2026-05/tad_dehaven_cropped.jpg?itok=03QvoUHm)](/people/tad-dehaven) ##### [Tad DeHaven](/people/tad-dehaven) Policy Analyst [![Chris Edwards](/sites/cato.org/files/styles/bio_picture_mobile/public/2021-01/Chris%20Edwards.jpg?itok=7VKn-jwF)](/people/chris-edwards) ##### [Chris Edwards](/people/chris-edwards) Kilts Family Chair in Fiscal Studies and Editor, DownsizingGovernment.org [![Santiago Forster Cropped](/sites/cato.org/files/styles/bio_picture_mobile/public/2025-11/Updated%20Santiago%20Forster%20Headshot%20Cropped.png?itok=yfI277fq)](/people/santiago-forster) ##### [Santiago Forster](/people/santiago-forster) Research Associate [![Scott Lincicome cropped](/sites/cato.org/files/styles/bio_picture_mobile/public/2023-10/scott-lincicome-square.jpg?itok=a5RaMdZx)](/people/scott-lincicome) ##### [Scott Lincicome](/people/scott-lincicome) Vice President, General Economics and Stiefel Trade Policy Center [![Adam N. Michel cropped](/sites/cato.org/files/styles/bio_picture_mobile/public/2023-02/adam-michel-cropped.jpg?itok=h2_TY9dW)](/people/adam-n-michel) ##### [Adam N. Michel](/people/adam-n-michel) Director of Tax Policy Studies [![j-mironcropped.jpg](/sites/cato.org/files/styles/bio_picture_mobile/public/2021-04/j-mironcropped.jpg?itok=febB3FKu)](/people/jeffrey-miron) ##### [Jeffrey Miron](/people/jeffrey-miron) Vice President for Research [![Alan Reynolds](/sites/cato.org/files/styles/bio_picture_mobile/public/2021-01/Alan%20Reynolds.jpg?itok=n13krecm)](/people/alan-reynolds) ##### [Alan Reynolds](/people/alan-reynolds) Senior Fellow [![Stephen Slivinski headshot square](/sites/cato.org/files/styles/bio_picture_mobile/public/2024-11/Stephen-Slivinski-cropped.jpg?itok=G41eZx7X)](/people/stephen-slivinski) ##### [Stephen Slivinski](/people/stephen-slivinski) Senior Fellow [![Ritvik Thakur](/sites/cato.org/files/styles/bio_picture_mobile/public/2025-08/Ritvik%20Thakur%20Cropped.png?itok=dffVmgZ0)](/people/rivtik-thakur) ##### [Ritvik Thakur](/people/rivtik-thakur) Research Associate