The government gets its revenue from taxes. It spends this money on social security and defence and other things. It borrows money through issuing government bonds when it wants to spend more money than it has received from taxes. A government bond is a promise from the government to repay the money at a certain time with a certain amount of interest.
Some governments like that of the USA have borrowed a lot of money and are servicing (paying interest on) a huge debt. The effect of this is that more and more government revenue is being used to pay the interest on the debt. Which means there is less to use on government programs. Which means the government has to borrow more in order to provide certain programs that citizens have come to expect, which means more interest to pay on more debt.
There are two ways to tackle the debt: Increase revenue and decrease spending.
The democrats under Biden and others appear to be loath to decrease spending, so they seek to raise revenue by increasing taxes. They constantly claim that billionaires are not paying enough tax. But who pays the taxes? Citizens who earn income; business owners; consumers who buy products.
Billionaires have become so by creating businesses which have paid taxes: payroll tax and sales tax. Imposing a wealth tax might raise some money in the short term, but will cause budding Billionaires to not want to become so because they don’t want to pay this wealth tax. So that tax base will shrink and there will be less and less revenue for the government. Also increasing taxes on businesses will cause that tax base to shrink. Why should a person start a business or grow a business when there is more tax to pay? People start businesses to make money. When the government takes more money it causes business owners to cease to operate and not invest. So increasing taxes may in the short term generate more revenue for the government, but will in the longer run, shrink the tax base and less revenue will be available. There will come a time when the government will not be able to borrow all the money it wants because the interest payments will be too high, and if the government fails to repay a bond, it won’t be able to borrow any money at all and will be in default with a bad credit rating. Government programs will then be unaffordable and many expected programs will cease to be able to be provided.
The democrats think that reducing taxes is crazy because they don’t think about investment and that when taxes are reduced, it motivates business creators to invest in new businesses and expanding current businesses which broadens the tax base and grows it because more people are employed and there are more sales and more taxes are collected. The democrats think that the tax base remains the same and that reducing taxes means less revenue whereas this is not the case. Reducing taxes actually increases government revenue .
Lets imagine that the tax base equals 100 people who are paying $10 in tax = $1000. The democrats think that if the tax rate is reduced so that these people pay $8, then the tax revenue will be $800. They don’t understand that other people will be encouraged by the lower tax rate to invest in new businesses, thus expanding the number who are paying the tax. So if the number of tax payers grew to 150 then the new tax revenue would be $1200.
So the democrats are assuming reducing tax will have no effect on the number of tax payers, whereas republicans are assuming that reduced taxes will increase the number of tax payers and this is what happened when President Trump reduced taxes in 2017. Tax revenue increased.
Tariffs make imported goods more expensive, so consumers in the USA have a choice: Either to pay more for the imported goods or to buy locally produced goods instead. It may be cheaper for them to buy local goods and in doing so they are benefiting local businesses who then sell more and employ more and more tax revenue is produced. This is what happens in a market economy.
So reducing taxes and raising tariffs will result in greater tax revenue for the government.