The erosion of the American tax base

This episode of Marketplace All-in-One explores the growing crisis in the American tax base, driven by declining tax revenue from both individuals and corporations despite record deficits. Host Kai Rizdal and guest Annie Lowry of The Atlantic trace the erosion of the tax system to decades of political inaction, with both major parties avoiding tax increases while expanding spending. The GOP's recent tax law benefited 85% of households, disproportionately favoring higher earners, while 88 of the largest U.S. companies paid no federal income taxes in their latest fiscal year. At the same time, the episode examines broader economic pressures: productivity gains are being driven more by pandemic-era automation than AI, consumer demand is weakening due to high energy costs and inflation, and the housing market is faltering—reducing demand for major appliances. The looming demographic shift, with an aging population and stagnant immigration, threatens to strain entitlement programs, raising urgent questions about fiscal sustainability. The segment concludes with a warning: the longer policymakers delay reform, the more likely a sudden, disruptive fiscal reckoning becomes—mirroring the delayed response to crises like COVID-19 and climate change.