> ## Content Index > Fetch the complete content index at: https://www.ceo.com/llms.txt > Use this file to discover other available public pages before exploring further. # The trust deficit is bigger than the budget deficit - URL: https://www.ceo.com/blog/the-trust-deficit-is-bigger-than-the-budget-deficit/ - Published: 2026-02-20T00:33:00.000Z - Updated: 2026-08-14T00:34:56.000Z - Description: Rothbard said all taxation is theft. Set that aside, and the case against these taxes gets stronger, not weaker. - Author: Clint Betts - Tags: #blog The great Murray Rothbard believed all taxation is theft. Not some taxation. Not excessive taxation. All of it. His position was that the state has no legitimate claim to any portion of anyone's income or wealth because the relationship between citizen and government is not voluntary. It is compulsory. You never signed a social contract. You never consented to the arrangement. It was imposed on you at birth and enforced ever since. In Rothbard's ideal, government would play such a limited role in society that you'd rarely think about its existence or who was in charge of it. Taxes would be unnecessary because the institutions they fund would be private. The roads, the courts, the schools. All of it. The state wouldn't need your money because, as we understand it, the state wouldn't exist. It’s a beautiful idea. And we couldn’t be further from its existence. --- We live in a world where the government commands armies, operates prisons, and holds a monopoly on violence. It can seize your property. It can restrict your movement. It can compel you, under threat of imprisonment, to hand over a portion of everything you earn. No private citizen has this power, regardless of how many billions they have accumulated. You can choose not to buy a billionaire's products. You cannot opt out of the government. That is the world as it actually exists. And in that world, with that power structure already in place, the question is not whether taxation should exist. It does. The question is more fundamental. How’s that money being spent? --- There’s a growing, overwhelmingly popular movement to tax the rich. Tax them good; tax them hard. In California, the [2026 Billionaire Tax Act](https://lao.ca.gov/BallotAnalysis/Initiative/2025-024?ref=ceo.com) would impose a one-time 5 percent tax on the net worth of every California resident with $1 billion or more. It would apply retroactively to anyone residing in the state as of January 1, 2026\. It targets roughly [255 people](https://www.cbsnews.com/news/california-billionaire-tax-ballot-initiative-how-it-works/?ref=ceo.com). In Washington, [SB 6346](https://clarknuber.com/articles/wa-state-millionaires-tax-proposed-legislation/?ref=ceo.com) passed the state Senate on February 16, 2026\. It would impose a 9.9 percent tax on individual income above $1 million per year. Washington has no state income tax, so this is not an adjustment. It is a structural transformation. Both proposals poll well, of course. Rich people problems and all that. [Pew Research found](https://www.pewresearch.org/short-reads/2025/03/19/most-americans-continue-to-favor-raising-taxes-on-corporations-higher-income-households/?ref=ceo.com) in early 2025 that 58 percent of Americans believe tax rates on household income over $400,000 should be raised. An [Economist/YouGov poll](https://truthout.org/articles/poll-voters-say-billionaires-pay-too-little-in-taxes-back-action-on-inequality/?ref=ceo.com) found 61 percent think billionaires' tax rates are too low. Even among 2024 Trump voters, a plurality said billionaire taxes are too low. [Eight in ten Americans](https://truthout.org/articles/poll-voters-say-billionaires-pay-too-little-in-taxes-back-action-on-inequality/?ref=ceo.com) view the wealth gap as a problem. In Washington, [54 percent of Republicans](https://senatedemocrats.wa.gov/blog/2026/02/16/millionaires-tax-passes-the-senate/?ref=ceo.com) support taxing millionaires. The argument is powerful; one might call it convincing. If you built a fortune using a state's infrastructure, legal systems, universities, and workforce, you owe something back. [Washington families in the bottom 20 percent](https://governor.wa.gov/news/2025/governor-ferguson-announces-support-millionaires-tax?ref=ceo.com) of income pay 13.8 percent of their total income in state and local taxes. Those in the top 1 percent pay 4.1 percent. The public agrees. The votes are there. The logic is sound. So why are the politicians pushing it so unpopular? Why are they bumping into a single roadblock? Thank you, dear reader, for asking the right question. --- [Fewer than one in five](https://www.pewresearch.org/politics/2025/12/04/public-trust-in-government-1958-2025/?ref=ceo.com) Americans trust the government to do the right thing most of the time. That is among the lowest readings in nearly seven decades of measurement. [Congress's approval](https://news.gallup.com/poll/700241/americans-end-year-gloomy-mood.aspx?ref=ceo.com) hovers around 15-17 percent. [Only 14 percent](https://today.yougov.com/politics/articles/53277-new-second-term-low-donald-trump-job-approval-government-spending?ref=ceo.com) of Americans trust Congress "a great deal" or "quite a bit," making it the least trusted institution among the 15 measured. [Trust in politicians](https://news.gallup.com/poll/697421/trust-government-depends-upon-party-control.aspx?ref=ceo.com) has dropped 23 points since the 1970s. Billionaires are unpopular. [Eighty percent of Americans](https://truthout.org/articles/poll-voters-say-billionaires-pay-too-little-in-taxes-back-action-on-inequality/?ref=ceo.com) say the rich have too much political power. But politicians are far more unpopular. It’s not even close. Oh, and they’re the ones we elected. They work for us. If a CEO had a 15 percent approval rating among shareholders, the board would replace them by morning. Politicians with a 15 percent approval rating propose new taxes. Were I advising those politicians (a scary thought), I would explain, in an overly kind Utahn way, that the tax-the-rich argument cannot work in isolation. The public already agrees with the premise. They do not need to be convinced that billionaires should pay more. What they need to be convinced of is that the money will be properly allocated once it arrives. And the record makes that case almost impossible. --- California has [faced budget deficits for three consecutive years](https://lao.ca.gov/Publications/Report/5091?ref=ceo.com): $27 billion, then $55 billion, then $15 billion. The state now faces an estimated $18 billion shortfall for 2026-27\. Between 2022 and 2024, California [experienced a $175 billion swing](https://www.governing.com/finance/can-california-ever-escape-its-boom-and-bust-budget-woes?ref=ceo.com) from surplus to deficit, driven in part by what officials [acknowledged](https://calmatters.org/commentary/2025/10/california-chronic-deficit-budget/?ref=ceo.com) was a $165 billion error in revenue projections. Not a rounding error. A $165 billion miscalculation. The state's Legislative Analyst now [warns of "chronic" structural deficits](https://calmatters.org/commentary/2026/02/newsom-spending-california-chronic-deficit/?ref=ceo.com) of $20 billion to $35 billion annually for years to come. California already relies on the personal income tax for [nearly 70 percent](https://www.governing.com/finance/can-california-ever-escape-its-boom-and-bust-budget-woes?ref=ceo.com) of its general fund revenue. The national average is 38 percent. The state has papered over its deficits with rainy day fund withdrawals, payment deferrals, internal borrowing, and curious [accounting maneuvers](https://lao.ca.gov/Publications/Report/5079?ref=ceo.com). This state, the golden one, is now asking 200 billionaires for $100 billion to fund healthcare. It cannot balance its own books. Why should its citizens trust them to use this billionaire windfall appropriately and judiciously? At the federal level, the GAO [identified 38 programs](https://usafacts.org/articles/which-government-programs-are-considered-wasteful-or-inefficient/?ref=ceo.com) as highly susceptible to fraud, waste, and mismanagement in its 2025 review. Twenty-eight have been on the list for more than a decade. Five have been there since 1990\. Thirty-five years of identifying the problem. Thirty-five years of not fixing it. The federal government [made $236 billion in improper payments](https://www.gao.gov/blog/federal-government-made-236-billion-improper-payments-last-fiscal-year?ref=ceo.com) in fiscal year 2023 alone. Over 20 years, the total is an estimated $2.7 trillion. If you are a politician asking for more money, this is your resume. This is what you are presenting to the public when you say, "trust us to spend even more tax revenue the right way this time." --- Massachusetts passed a millionaire surtax in 2022, and millionaires didn't flee. The [number of millionaires](https://www.cbsnews.com/news/california-billionaire-tax-ballot-initiative-how-it-works/?ref=ceo.com) in the state rose by 39 percent in the two years that followed. Good. But that is an argument about migration, not stewardship. The question is not whether rich people will leave. The question is whether the money made a difference once it arrived. Did outcomes improve? Were the funds tracked? Almost nobody applies that standard. And that is the problem. A [February 2026 poll](https://www.foxbusiness.com/media/californias-billionaire-tax-disastrous-cause-wealthy-flee-economist-predicts?ref=ceo.com) found that 60 percent of California's likely voters support the billionaire tax. A majority of those same respondents said the measure would spark a business exodus and cost local jobs. People support the tax. They also believe it will backfire. That is not hypocrisy. That is a public that believes in fairness but has given up on competence. --- Rothbard would say none of this matters. He would say the institution collecting the money is illegitimate, regardless of how well it spends. He would say that the monopoly on force is the problem itself, not a reason to demand better performance from those who wield it. Maybe he's right (he is). But we are a long way from that world. In this one, the government exists. It taxes. It spends. It holds power that no private citizen holds. And because it holds that power, because it alone can compel payment under threat of imprisonment, it should be held to a higher standard than those it taxes. Not an equal standard. A higher one. So here is the advice offered to any politician in Sacramento, Olympia, or anywhere else making the case that the wealthy should pay more. The public agrees. The votes are there. You do not have a persuasion problem. You have a credibility problem. Get your house in order. Show the public you can track where the money goes. Stop papering over deficits with one-time fixes. Stop fighting over how to spend revenue that doesn't exist yet. Demonstrate that existing dollars are being spent in ways that justify asking for more. Then come ask for more.