diff --git a/taggit/management/commands/deduplicate_tags.py b/taggit/management/commands/deduplicate_tags.py
index 647d7873..2f1f512a 100644
--- a/taggit/management/commands/deduplicate_tags.py
+++ b/taggit/management/commands/deduplicate_tags.py
@@ -19,20 +19,46 @@ def handle(self, *args, **kwargs):
 
         tags = Tag.objects.all()
         tag_dict = {}
-        tagged_items_to_update = defaultdict(list)
 
         for tag in tags:
             lower_name = tag.name.lower()
             if lower_name in tag_dict:
                 existing_tag = tag_dict[lower_name]
-                self._collect_tagged_items(tag, existing_tag, tagged_items_to_update)
-                tag.delete()
+                self._deduplicate_tags(existing_tag=existing_tag, tag_to_remove=tag)
             else:
                 tag_dict[lower_name] = tag
 
-        self._remove_duplicates_and_update(tagged_items_to_update)
         self.stdout.write(self.style.SUCCESS("Tag deduplication complete."))
 
+    @transaction.atomic
+    def _deduplicate_tags(self, existing_tag, tag_to_remove):
+        """
+        Remove a tag by merging it into an existing tag
+        """
+        # If this ends up very slow for you, please file a ticket!
+        # This isn't trying to be performant, in order to keep the code simple.
+        for item in TaggedItem.objects.filter(tag=tag_to_remove):
+            # if we already have the same association on the model
+            # (via the existing tag), then we can just remove the
+            # tagged item.
+            tag_exists_other = TaggedItem.objects.filter(
+                tag=existing_tag,
+                content_type_id=item.content_type_id,
+                object_id=item.object_id,
+            ).exists()
+            if tag_exists_other:
+                item.delete()
+            else:
+                item.tag = existing_tag
+                item.save()
+
+        # this should never trigger, but can never be too sure
+        assert not TaggedItem.objects.filter(
+            tag=tag_to_remove
+        ).exists(), "Tags were not all cleaned up!"
+
+        tag_to_remove.delete()
+
     def _collect_tagged_items(self, tag, existing_tag, tagged_items_to_update):
         for item in TaggedItem.objects.filter(tag=tag):
             tagged_items_to_update[(item.content_type_id, item.object_id)].append(
diff --git a/tests/test_deduplicate_tags.py b/tests/test_deduplicate_tags.py
index b0f63feb..b7aa782f 100644
--- a/tests/test_deduplicate_tags.py
+++ b/tests/test_deduplicate_tags.py
@@ -21,10 +21,11 @@ def setUp(self):
 
         self.food_item.tags.add(self.tag1)
         self.pet_item.tags.add(self.tag2)
+        self.pet_item.tags.add(self.tag3)
 
     def test_deduplicate_tags(self):
         self.assertEqual(Tag.objects.count(), 3)
-        self.assertEqual(TaggedItem.objects.count(), 2)
+        self.assertEqual(TaggedItem.objects.count(), 3)
 
         out = StringIO()
         call_command("deduplicate_tags", stdout=out)
@@ -41,7 +42,7 @@ def test_deduplicate_tags(self):
 
     def test_no_duplicates(self):
         self.assertEqual(Tag.objects.count(), 3)
-        self.assertEqual(TaggedItem.objects.count(), 2)
+        self.assertEqual(TaggedItem.objects.count(), 3)
 
         out = StringIO()
         call_command("deduplicate_tags", stdout=out)
@@ -65,4 +66,4 @@ def test_taggit_case_insensitive_not_enabled(self):
         self.assertIn("TAGGIT_CASE_INSENSITIVE is not enabled.", out.getvalue())
 
         self.assertEqual(Tag.objects.count(), 3)
-        self.assertEqual(TaggedItem.objects.count(), 2)
+        self.assertEqual(TaggedItem.objects.count(), 3)