Originally published at Kansas Policy Institute.

A new Kansas state audit shows taxpayers have paid a steep price for property tax exemptions. This is because these political choices just shift the burden of paying for government spending from selected winners to losers.

The Kansas Legislative Division of Post Audit estimates that property tax exemptions tied to Industrial Revenue Bonds reduced local government tax revenue collected by $1.1 billion from 2010 through 2024. This includes $436 million from school districts, $316 million from counties, $182 million from cities, and $151 million from hospitals, townships, and other local governments.

The real cost to taxpayers is higher because Kansas does not fully track the sales tax exemptions tied to these projects, nor does it account for the opportunity cost of those exemptions. 

Three related problems stand out.

Government Cannot Pick Winners WellSupporters say tax incentives bring jobs and investment. That may happen. But the real question is whether politicians can allocate money more effectively than people in the marketplace. Usually, they cannot.

Businesses risk their own money. Government officials risk taxpayers’ money. That changes the incentives. Politicians receive praise when they announce a new project. They hold press conferences and cut ribbons. The costs are spread across taxpayers for years, often with little public attention.

As I explained in “Subsidies Cost Kansans Even When Revenues Rise,” every special deal has an opportunity cost. Money used to benefit one company cannot also lower tax rates for every business, reduce property taxes for homeowners, or improve core services. Markets reward businesses that serve customers. Corporate welfare rewards businesses that win political approval.

Nobody Knows the Full CostThe audit also shows how weak the state’s cost estimates have been.

Auditors reviewed 23 projects and found that some cost-benefit analyses failed to capture the actual property tax impact by enormous amounts. Estimates ranged from 94 percent too low to 6,065 percent too high.

State Sen. Joe Claeys called the process “compliance theater.” That description fits. A cost-benefit study should help policymakers make better decisions. When estimates miss reality by thousands of percent, the study becomes little more than paperwork used to justify a deal already favored by officials.

Oversight was also weak. Sedgwick County found at least 112 property tax exemptions that were never sent to the Board of Tax Appeals for approval as required by law. County officials said the problem may have continued for as long as 30 years. If governments cannot measure the costs or follow their own rules, taxpayers should question why they are handing out special deals at all.

Special Deals Grow GovernmentEvery incentive requires applications, reviews, exemptions, reports, compliance checks, and audits. The system becomes more complicated while accountability becomes weaker.

Kansas has used corporate incentives for decades, yet the state still struggles with long-term growth. The 2026 Kansas Green Book shows Kansas has ranked poorly in private-sector job growth, wage growth, economic growth, and domestic migration over the past quarter-century. Special favors have not fixed those problems.

Kansas Needs Broad ReformKansas does not need better corporate welfare. It needs a better economic policy.

Lawmakers should phase out Industrial Revenue Bond tax abatements and replace them with less spending and lower tax rates to help every business. This could also include simplifying regulations, speeding up permitting, and keeping state spending from growing faster than population growth plus inflation, as recommended by the Sustainable Budget Project.

These reforms would help companies already operating in Kansas, not just businesses threatening to move unless they receive a subsidy.

Equal Rules Produce Better ResultsMilton Friedman often reminded us that people spend their own money more carefully than they spend someone else’s.

The audit proves his point.

Kansas taxpayers gave up at least $1.1 billion through a system with weak estimates, missing data, and poor oversight. Meanwhile, favored companies received benefits that ordinary businesses and homeowners did not.

Economic development should not depend on which company hires the best lobbyist or negotiates the largest tax break. The best incentive Kansas can offer is equal treatment: lower taxes, restrained spending, simple rules, and a government that protects opportunity instead of choosing winners.

That approach may produce fewer ribbon cuttings. It will produce more lasting prosperity. 

​Everyone wants to know when the next recession is coming. Wall Street watches every data release. Politicians blame their opponents. The Federal Reserve tries to read the tea leaves. And too many commentators treat recessions as if they are an inevitable punishment after a long expansion. But what if much of that conventional wisdom is wrong?

In this episode of the Let People Prosper Show, I’m joined by Dr. Tyler Goodspeed, Chief Economist at ExxonMobil and an adjunct scholar at the Cato Institute, to discuss his new book, Recession: The Real Reasons Economies Shrink and What to Do about It.

Tyler brings a rare combination of economic history, macroeconomic expertise, and real-world policymaking experience. He served as Chair of the White House Council of Economic Advisers during the first Trump administration and previously served as Vice Chairman and Chief Economist for Macroeconomic Policy. We overlapped during my time at the White House Office of Management and Budget, where these debates were not academic. They shaped real decisions affecting millions of Americans. With dual PhDs in economics and history, Tyler has the long-run perspective needed to challenge the easy stories politicians tell about downturns. 

The goal should not be for the government to micromanage the economy. The goal should be to understand what actually causes downturns, avoid making them worse, and build the conditions for stronger long-run growth.

🌐 Learn more about my work at vanceginn.com

📩 Subscribe for show notes at vanceginn.substack.com

Originally published on Substack.

​My work this week kept coming back to one theme: government keeps finding new ways to trap people.

Property taxes trap homeowners in perpetual payments to government. Exit taxes try to trap residents in failing states. Regulatory barriers threaten to trap innovation before it can grow. Bloated state budgets trap taxpayers with rising future burdens. And the Fed’s oversized balance sheet traps markets in a cycle of distortion and dependency.

Different issues. Same root problem.
Government grows, taxpayers pay, markets distort, and freedom shrinks.

That is why spending restraint, property rights, sound money, and economic freedom are not abstract ideas. They are the difference between owning your home or renting from government, moving freely or being punished for leaving, building the future or regulating it away, and saving in dollars that hold value or dollars that keep losing purchasing power.

Here’s the week’s breakdown.

Stop Renting From Government

A property tax revolt is building across America, and it is overdue.

You can pay off your mortgage, maintain your home, insure it, improve it, and still receive a government bill every year just to keep what you already own. Miss enough payments, and the government can ultimately take the property.

That is not true ownership.

That is renting from the government forever.

This is why states such as Florida, Texas, Wyoming, Nebraska, Iowa, Montana, and others are debating property tax relief or elimination. But too many proposals still miss the core point: property taxes are primarily a spending problem.

My latest piece, Stop Renting From the Government: Consider Wyoming, builds on my new Wyoming brief showing that the state spent roughly $4 billion above a population-growth-plus-inflation benchmark from FY 2017 to FY 2025 while building major reserves. The fiscal capacity for meaningful relief exists. What’s missing is the political discipline to restrain spending and return surplus dollars to taxpayers.

That same principle drives my new national report, Securing Ownership by Eliminating Property Taxes, which uses Montana as a case study. Montana is especially important because it has no broad statewide sales tax, yet spending has still outpaced sustainable limits. That proves the problem is not a lack of revenue. The problem is government spending too much.

Homestead exemptions, assessment caps, targeted rebates, and one-time checks may sound good politically, but they mostly shift burdens and leave the spending machine untouched. The better path is strict state and local spending limits tied to population growth plus inflation, surplus-driven rate compression, school finance reform, and constitutional taxpayer protections.

Read the Wyoming piece here, the Montana framework here, and share the Wyoming property tax thread on X.

Let AI Build

AI infrastructure is not abstract.

It needs land, power, fiber, water, transmission, and data centers on the ground. Kansas can either welcome that opportunity with light-touch rules and fast permitting, or it can let local zoning, regulatory uncertainty, and political fear hand the future to larger, politically connected firms that can afford the compliance costs.

In my piece for Kansas Policy Institute, Kansas Should Welcome AI Growth, Not Zone It Away, I argue that Kansas does not need subsidies or corporate welfare to benefit from AI infrastructure. It needs predictable, market-driven rules that let builders build, communities benefit, and competition work.

Regulatory bottlenecks rarely protect the little guy. More often, they protect incumbents by raising the cost of entry.

The AI economy will not wait for states to get comfortable. The infrastructure will be built somewhere. The question is whether Kansas and other states want more opportunity, investment, tax base, and energy innovation, or whether they want to regulate the future away.

Exit Taxes Admit Failure

When people and capital leave high-tax states, politicians have two choices.

They can reform the policies that drove people away, or they can punish people for leaving.

Too many are choosing the second option.

In my latest piece for AIER, Exit Taxes Won’t Save Failing States, I argue that exit taxes are not serious fiscal policy. They are a confession of failure.

Economic freedom means people can move to where they are treated best. Families leave when taxes are too high, housing is too expensive, regulation is too heavy, crime is too high, or opportunity is better elsewhere. Businesses move when the policy environment becomes hostile to investment, hiring, and growth.

The right response is not to trap people.

The right response is to compete for them.

Flatten taxes. Restrain spending. Reduce red tape. Protect property rights. Make the state worth staying in.

Exit taxes are the policy equivalent of a bad business charging customers a fee to stop shopping there.

Texas Needs Accountability

Episode 200 of the Let People Prosper Show is here, and we did not spend it on a highlight reel.

I sat down with Jeramy Kitchen, president of Texas Policy Research, for a serious conversation on whether the “Texas Miracle” still matches reality. We talked about rising government spending, persistent property tax pain, school finance, corporate welfare, and the need for real accountability in a state that too often relies on branding instead of restraint.

Texas still has enormous advantages: no personal income tax, a dynamic economy, energy abundance, entrepreneurship, and a strong culture of work. But those advantages must be protected. A reputation for freedom is not self-executing.

The state has to earn it every session.

That means real spending restraint, property tax elimination through surplus-driven compression, broader school choice, less corporate welfare, and more respect for taxpayers.

You can listen to Episode 200 on Apple Podcasts, watch it on YouTube, and share the episode thread on X.

Shrink the Fed

With Kevin Warsh now sworn in as Federal Reserve Chair, the moment demands more than rate talk.

The deeper issue is the Fed’s balance sheet, which remains far too large and continues to distort markets, punish savers, reward leverage, and enable congressional fiscal recklessness.

In Kevin Warsh’s Fed Moment, I argue that real monetary reform should mean a rules-based framework for price stability, a path toward a 0 percent inflation target, and a dramatically smaller balance sheet. My North Star is a Fed balance sheet capped near 6 percent of GDP, compared with roughly 20 percent today, until it can be eliminated.

That means letting short-term assets mature without rolling them over, exiting mortgage-backed securities, and returning the Fed to a narrow lender-of-last-resort role until we can ultimately move beyond central banking altogether.

This connects directly to property taxes, exit taxes, and state spending. When government grows faster than the productive economy, people pay through higher taxes, higher prices, distorted markets, trapped mobility, and weaker prosperity.

Sound money and spending restraint go together.

The Bottom Line

This week’s lesson is clear: government is too often trying to trap people.

Property taxes trap homeowners in perpetual payments. Exit taxes try to trap residents geographically. Regulatory barriers trap innovation. Monetary distortions trap markets in dependency. Excessive spending traps taxpayers with rising future burdens.

The answer is not better central planning.

The answer is to constrain government, protect property rights, restore sound money, and let free people and markets allocate resources better than politicians ever can.

That is how we let people prosper.

Five Takeaways for Policymakers

1. Property tax relief without spending limits is cosmetic.

States should enact binding expenditure limits tied to population growth plus inflation, use surpluses for rate compression, and protect taxpayers constitutionally.

2. Exit taxes signal failure.

If people are leaving, fix the tax, spending, regulatory, and public safety problems that pushed them out.

3. AI infrastructure needs permission to grow.

States should streamline permitting, avoid subsidies, reject local regulatory choke points, and let competition work.

4. The Fed’s size matters as much as rates.

A bloated balance sheet distorts markets and enables fiscal recklessness. Rules-based reform and balance-sheet reduction should be central.

5. Texas and every other state must earn their reputation daily.

Prioritize taxpayers over cronies, transparency over branding, and spending restraint over expansion.

Join the Conversation

Thank you for reading and sharing this work. If this added value, please forward it to a policymaker, staffer, journalist, homeowner, business owner, or friend who cares about ownership, mobility, sound money, and prosperity.

I’d especially like to hear from you: What is the best path to eliminating property taxes in your state?
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Drop your thoughts in the comments, share this post with someone who should read it, and follow me on X for real-time updates.

Policymakers, policy staff, or media: Check out the full report and contact me at the button below if you'd like to discuss. ​

Originally published at The Daily Economy. 

​When a state starts floating an exit tax, it is telling you something more important than any campaign slogan: the people running the place know their model is not working. 

They may not say it that way. They will call it fairness, responsibility, or making the wealthy “pay what they owe.” But the meaning is the same. 

If families, entrepreneurs, and investors are leaving, the state can either ask why its policies are pushing them out, or it can try to tax them for escaping. An exit tax chooses punishment over reform. 
​
I understand why these proposals resonate with some people. If you are watching wealthy residents relocate while governments still face bills for schools, roads, pensions, and other commitments, it is easy to feel like the people with the most mobility are ducking the tab. 

That frustration is real. It deserves a serious answer. But an exit tax is not a serious answer. It is a confession that lawmakers would rather cling to a failing fiscal model than fix the spending, regulation, and tax policies that made people want to leave in the first place. 

That is why the current trend is so revealing. In California, proposals have centered on taxing billionaire net worth, including wealth that often exists on paper rather than in cash. In New York, the push has extended to a new surcharge on high-value second homes in New York City.

In Washington, lawmakers have already enacted a “millionaires’ tax.” These policies differ in form, but not in spirit. They all send the same message: if government has made your state too expensive, too hostile, or too unpredictable, it may still try to claim part of your future anyway. 

The economics are worse than the politics. Supporters talk as if wealth is a pile of idle cash sitting in a vault, just waiting to be skimmed. It is not. Wealth is usually tied up in businesses, shares, property, and future earnings. 

Taxing net worth or unrealized gains means taxing value that often has not been sold, realized, or converted into cash. That can force asset sales, dilute business ownership, weaken investment, and change behavior long before the tax collector ever gets a check.

 A Hoover Institution analysis of California’s proposal found that once likely migration responses are considered, the measure could leave the state with a negative net present value of about $25 billion. That is the real lesson: politicians score the tax statically, but the economy does not sit still. 

And that is before you get to the broader evidence. The OECD has noted that recurring net wealth taxes have become much less common across advanced economies because they tend to raise less revenue than promised while creating large compliance costs, avoidance incentives, and economic distortions. Countries tried them. Many backed away. 
​
A recent NBER study on Scandinavian wealth taxation found that higher top wealth-tax rates reduced the number of wealthy taxpayers and that many of those taxpayers were business owners whose departure reduced investment, employment, and value-added. 

​That is the part too often ignored in political talking points. When a state drives out a founder, investor, or employer, it is not just losing one tax return. It is losing future jobs, future capital formation, and future opportunity for everybody else too. 

Defenders of exit taxes still fall back on one argument that sounds morally satisfying: these taxpayers benefited from state infrastructure, legal protections, and markets while they lived there, so the state deserves one final cut.

But that argument quietly rewrites the relationship between citizen and government. It turns moving into a taxable offense. It says the state retains a lingering claim on your success because you once lived under its jurisdiction. That is a dangerous principle in a federal system built on mobility and competition.

Even in the international arena, exit taxes are controversial, complex, and tied to specific movements of assets or functions across borders. Importing that logic into state tax policy is not modernization. It is escalation. 

The problem is not just that these taxes are bad economics. It is that they usually do not stay narrow. Politicians sell them as a tool aimed only at billionaires or luxury homeowners — policy aimed at an applause line. But when the revenue falls short, the scope expands. 

One-time wealth taxes become annual property surcharges. “Billionaire” thresholds are expanded to target millionaires and eventually the middle class. “Temporary” taxes become permanent fiscal architecture. New York’s pied-à-terre proposal is a good example of how quickly the logic expands once the principle is accepted. 

Frédéric Bastiat warned us to look not just at what is seen, but at what is unseen. We see the tax revenues. That’s a small, visible victory compared to the investment that never happens, the entrepreneur who builds elsewhere, jobs that never arrive — the unseen costs compound. 

Exit taxes are built on ignoring all of that. 

Claiming an exit tax frames mobility as theft, when it is often a rational response to bad governance. They do not restore prosperity. They steal the opportunity to prosper by doubling down on the very policies that made growth harder in the first place. 

If lawmakers want to deter departures, the answer is not a fiscal trap door. It is better policy: lower taxes, lighter regulation, spending restraint, and a serious effort to make their states places where productive people want to stay.

Real economic renewal is more difficult than yet more taxation, but it is also the only approach that works. Exit taxes will not save failing states. They only confirm why people wanted to leave.

Originally published on Substack. 

Politicians love to tell taxpayers the same story after elections: government needs more money, taxes have to go up, and families just need to pay more.

But states across the country are proving that story wrong.

The latest income tax map by Americans for Tax Reform shows a major policy shift happening in real time. More states are moving away from progressive income taxes and toward flatter, lower, and eventually zero income taxes. That matters because income taxes do two harmful things: they punish work, saving, investment, entrepreneurship, and success, and they give politicians permanent access to your paycheck.

That is the wrong relationship between citizens and government.

Government should have to justify what it spends. Taxpayers should not have to justify keeping what they earn.

How to Read the Map
​
The ATR map below is useful because it shows more than today’s tax rates. It shows the direction states are moving.

Green states have zero income taxes. Yellow states have flat income taxes. Gray states still have graduated income taxes, where rates rise as people earn more. Striped states have passed legislation to eliminate income taxes over time, while other markings show states that have passed legislation to move to a flat income tax or where state leaders have endorsed income tax phaseouts.
​
That distinction matters.

A state’s current tax rate tells you where it is today. But triggers, phaseouts, and flat-tax reforms tell you where the state is trying to go. And increasingly, the reform direction is clear: lower, flatter, simpler, and eventually zero!

The ATR map notes that states including South Carolina, North Carolina, Mississippi, Oklahoma, Indiana, Kentucky, West Virginia, Georgia, Ohio, Kansas, Idaho, Utah, and Montana have recently cut rates, moved toward flatter structures, or adopted triggers that keep pressure on future tax relief. And state leaders in multiple states have endorsed income tax elimination, showing that this is no longer a fringe idea. It is becoming a serious governing strategy.

Income Taxes Punish Prosperity

Income taxes are among the most destructive taxes because they fall directly on people’s productive activity.

Work more, and government takes more.

Earn more, and government takes more.

Save more, invest more, build more, and take more risks, and government takes more.

That is bad economics and bad moral reasoning.

A state should want more work, more entrepreneurship, more investment, and more upward mobility. Yet income taxes penalize all of those things. They tell families, workers, and employers that success is a revenue source for politicians.

That is why the long-run goal should be clear: no income tax!

Flat taxes are better than progressive taxes because they are simpler and less punitive at the margin. Lower rates are better than higher rates because they reduce the penalty on work and investment. But the North Star should be zero.

The Momentum Is Real

The momentum is not happening in just one state.

Mississippi passed legislation to reduce its individual income tax to 3 percent by 2030 and then continue toward zero if fiscal conditions are met. Oklahoma reduced its rate and created a path toward further reductions. Indiana cut its flat tax and created future trigger-based reductions. Kentucky has been moving down through a flat-tax trigger model. Georgia has been reducing its flat rate. Ohio moved toward a flatter, lower structure. South Carolina moved toward a lower-rate system with potential future reductions.

This is the tax competition model working.

States are watching each other. Lawmakers are learning from each other. Taxpayers are asking why their own states cannot do the same.

And they should.

But Tax Cuts Alone Are Not Enough

Here is the part too many tax-cut conversations miss: most states are still spending too much.

That is where the ATR Sustainable Budget Project is essential. ATR updated its data through FY 2025 and compares state spending to a simple benchmark: population growth plus inflation. That benchmark reflects the average taxpayer’s ability to pay for government. If spending grows faster than population growth plus inflation, government is growing faster than taxpayers can reasonably afford.

And the results are sobering.

From 2016 to 2025, aggregate state spending, excluding federal transfers, rose 65.8 percent, while population growth plus inflation rose only 32.4 percent.

That is the bigger issue.

The problem is not that taxpayers are undertaxed. The problem is that government overspends.

Only a Few States Show Real Restraint

ATR’s Sustainable Budget Project found that only eight states kept their budgets below population growth plus inflation in at least one key category. Just Colorado, North Dakota, and Texas kept both state funds and all funds spending growth below the benchmark over the decade. Five more states, Iowa, Louisiana, Mississippi, Ohio, and Oklahoma, kept state funds growth below the benchmark but not all funds.

That means the vast majority of states, including many states moving in the right direction on tax reform, still have a spending problem.

This is why income tax elimination must be paired with spending restraint.

Otherwise, lawmakers will simply cut one tax, keep spending too much, and later raise another tax. That is not tax reform. That is tax shifting.

Economic Freedom Wins

The income tax movement also connects to a bigger story: economic freedom.
​
The Fraser Institute’s Economic Freedom of North America 2025 report measures the degree to which governments allow people to make their own economic choices.

It finds that from 2014 to 2023, population in the freest U.S. states grew nearly 18 times faster and statewide personal income grew nine times faster than in the least-free states.
​
That is not random.

People chase opportunity. Workers chase better job markets. Families chase affordability. Entrepreneurs chase places where success is rewarded instead of punished.

States with lower taxes, restrained spending, and lighter regulatory burdens tend to create better environments for people to prosper.

The Opposition Knows This

The political class understands what is at stake.

Government unions, left-wing activists, and defenders of big government know that if more states eliminate income taxes successfully, taxpayers everywhere will ask the obvious question:

Why are we paying so much?

That is why these reforms face so much resistance.

The fight is not really about one rate or one bracket. It is about who controls the future: taxpayers or government.

The political class prefers permanent revenue. Taxpayers deserve permanent relief.

The North Star

The best path is straightforward.

First, cap spending growth to less than population growth plus inflation. Second, use excess revenue (surpluses) to buy down income tax rates. Third, broaden the tax base by eliminating carveouts instead of raising rates. Fourth, use triggers that continue reducing income taxes until they are gone. Fifth, protect taxpayers from backdoor tax hikes through property taxes, fees, and hidden regulatory costs.

That is how states can move from progressive taxes to flat taxes, from flat taxes to lower rates, and from lower rates to zero.
Income tax elimination is not reckless when spending is restrained. It is reckless to keep spending too much and demand that taxpayers pay more forever.

Three Takeaways for Policymakers

1. Income taxes punish prosperity.

They penalize work, saving, investment, entrepreneurship, and success. States that want more opportunity should move toward flatter, lower, and ultimately zero income taxes.

2. Spending restraint must come first.

The ATR Sustainable Budget Project shows most states are spending faster than population growth plus inflation. Tax cuts will last only if lawmakers control spending.

3. Economic freedom is the competitive advantage.

The Fraser Institute shows freer states grow faster. Lower taxes, restrained spending, and lighter regulatory burdens attract people, income, jobs, and investment.

The Bottom Line

The race to zero income taxes is one of the most important state policy movements in America.

It says government should not have first claim on your paycheck. It says work should be rewarded, not punished. It says states should compete to attract families, entrepreneurs, and investment. And it says taxpayers are tired of being told government must always grow while their own budgets get tighter.

But tax reform without spending restraint is a mirage.

The states that win will be the ones that cut taxes, restrain spending, and expand economic freedom together.

That is how states let people prosper.

Thank you for reading and for sharing my work. If this added value to your week, please pass it along to a policymaker, staffer, journalist, or friend who should read it. Through Ginn Economic Consulting, I am glad to help policymakers, organizations, and leaders think through tax reform, spending restraint, competitiveness, and broader pro-growth policy that lets people prosper.

​In Episode 198 of the Let People Prosper Show, I sit down with Jack Salmon of the Mercatus Center to discuss one of the most important lessons in state policy: people respond to incentives.

Politicians often claim they can raise taxes only on “the rich” without consequences. But high earners, entrepreneurs, and capital are increasingly mobile. When states raise taxes too aggressively, they risk driving away investment, weakening their tax base, and creating deeper fiscal problems over time.

This episode covers tax migration, wealth taxes, Washington State’s new high-income tax, state competitiveness, and why spending restraint is the foundation of sustainable fiscal policy.

The better path is clear: lower and flatter taxes, disciplined spending, economic freedom, and policies that attract people rather than punish productivity.

Watch or listen to Episode 198 on YouTube, Apple, or Spotify, and get show notes at vanceginn.substack.com. 

Originally published on RealClear Markets.

The Trump administration has opened a Section 232 national security investigation into imported medical products. It is being sold as a supply-chain resilience effort. But it is a tax on Americans that raises healthcare costs for patients.

The Commerce Department’s probe covers medical equipment, personal protective equipment, and a wide range of health technologies used every day in hospitals and clinics. The scope is so sweeping that it now threatens robotics and medical devices—the tools modern medicine depends on.

Supply-chain vulnerabilities are real. COVID exposed weaknesses, especially for critical supplies. But tariffs are the wrong tool. They do not build domestic capacity on a meaningful timeline and impose immediate costs on families.

Tariffs are taxes. They are not paid by foreign governments. They are paid by American importers and passed through to hospitals, providers, insurers, employers, and families. That is why tariffs are a particularly bad way to raise tax revenue: they hide the tax, distort decisions, and raise costs across the economy.

President Trump has highlighted the revenue appeal of tariffs in his State of the Union remarks, even suggesting tariffs could replace other taxes. But “revenue” from tariffs is money taken from Americans through higher prices at home. There is nothing conservative about a hidden tax that hits working families hardest.

Healthcare is the worst place to run this experiment. Medical supply chains are global because they rely on specialization, scale, quality controls, and reliable access to components. Even when a device is assembled in America, key parts are often sourced internationally. A tariff hits finished devices and the inputs that make them. When you tax the supply chain, you tax the care.

Hospitals cannot simply stop buying essential supplies and equipment. Providers cannot delay purchases of critical tools without affecting patient care. Higher costs do not disappear. They get passed through as higher charges, higher negotiated rates, higher premiums, and higher out-of-pocket bills.

The supply-chain mechanicsbehind this pass-through are complex. When procurement costs rise or supplies tighten, healthcare systems absorb strain, and patients feel it downstream. Tariffs are not an abstract policy lever. They land in exam rooms and operating rooms.

A large hospital system that spends hundreds of millions of dollars each year on devices and supplies can face millions—or tens of millions—more in additional costs under broad tariffs. Rural and safety-net hospitals operating on thin margins get squeezed first. The people harmed first are the people with the least ability to pay more: seniors on fixed incomes, families with high deductibles, and patients who cannot absorb another surprise bill.

Tariffs also weaken domestic competitiveness in the name of strengthening it. Medical devices operate in a globally integrated market with complex sourcing and distribution. Taxing key inputs does not make American manufacturers stronger. It raises their costs, reduces investment flexibility, and makes the sector less nimble.

If policymakers want stronger supply chains and more domestic production, they should start with the barriers at home that actually deter investment: regulatory delays, compliance burdens, and uncertainty that slow expansion. They should diversify sourcing through trusted allies and redundancy rather than pretending the U.S. can reshore everything overnight without major cost increases. 

Resilience comes from competition and flexibility, not from a blunt tax that hits every hospital purchase order immediately. Free trade remains the path to prosperity because it lowers costs, expands choice, and strengthens the economy's productive capacity, including in healthcare. The same principle applies to medical tools.

If this Section 232 investigation results in more tariffs, Washington will be taxing pacemakers, insulin pumps, imaging machines, and the supplies that keep hospitals running. That does not make America healthier or safer. It makes healthcare more expensive—right when families can least afford it.