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Tariffs and Flat Tax
Posted on 8/8/25 at 5:20 am
Posted on 8/8/25 at 5:20 am
The conservatives have long wanted a flat tax. Are the tariffs partially that?
Assume that the entire cost of tariffs is passed on to consumers. We all buy stuff, so that means the new revenue (up to a trillion bucks) is spread across nearly the entire population.
So we reduce the deficit by half, and everyone chips in.
Note: I’m not an economist, a tariff expert, or a pundit. This is straight out of my arse.
But if it actually works like that, it’s a pretty shrewd way to impose a partial flat tax without having to go through Congress.
And I have to think that if you lop a billion off the deficit, interest rates will come down and the stock market will zoom.
Assume that the entire cost of tariffs is passed on to consumers. We all buy stuff, so that means the new revenue (up to a trillion bucks) is spread across nearly the entire population.
So we reduce the deficit by half, and everyone chips in.
Note: I’m not an economist, a tariff expert, or a pundit. This is straight out of my arse.
But if it actually works like that, it’s a pretty shrewd way to impose a partial flat tax without having to go through Congress.
And I have to think that if you lop a billion off the deficit, interest rates will come down and the stock market will zoom.
3
Posted on 8/8/25 at 5:22 am to RanchoLaPuerto
quote:
Note: I’m not an economist, a tariff expert, or a pundit.
Shocking
Posted on 8/8/25 at 5:43 am to tiger1014
quote:
Shocking
Not an electrician, either.
Posted on 8/8/25 at 5:45 am to RanchoLaPuerto
I think I see the argument you are trying to make but you may be a little off.
The term flat tax is commonly meant as a single rate income tax.
Tariffs are a type of consumption tax.
Either one can be flat, as in single rate.
The comparison should be system to system.
That being income tax system vs. consumption tax system.
They can both be set up to deliver the same amount of revenue needed.
So the question becomes, which system can deliver that revenue in the most efficient and least intrusive manner?
The term flat tax is commonly meant as a single rate income tax.
Tariffs are a type of consumption tax.
Either one can be flat, as in single rate.
The comparison should be system to system.
That being income tax system vs. consumption tax system.
They can both be set up to deliver the same amount of revenue needed.
So the question becomes, which system can deliver that revenue in the most efficient and least intrusive manner?
Posted on 8/8/25 at 6:10 am to RanchoLaPuerto
I think of tariffs as a way to encourage elements of production within the USA or take advantage of cheap labor in other countries to produce stuff that is not important.
For instance - I don't care if China makes dime store trinkets - but I do not want to be dependent on them to make our medicine or technically critical components for defense, for example.
SO - how do we encourage that good outcome? - We COULD employ a low salary strategy to compete directly with 'slave wages' rates, OR we could make the stuff produced by "slave labor" cost just as much as the same things we build here at our large rates - but our standard of living would suffer.
SO - as I see it, tariffs would encourage us to build and market this stuff HERE - rather than unloading it off a boat from China. AND - in the act of creating more structures and power to run the new factories, we would then incite a whole lot of OTHER beneficial ancillary job-producing activity.
To me it is a way to combat slave wages in other countries being an advantage to that country in debasing OUR economy while make US dependent on THEM for critical items - which they could, in time of war or other hostility, hold us hostage.
IF the tariff makes it too expensive to buy, then that means it is not worth the cost of making it here. I am willing to struggle getting by without plastic Christmas presents.
I would like to see much MORE of a tariff driven economy - combined with additional consumption taxes for our national revenue generation needs.
For instance - I don't care if China makes dime store trinkets - but I do not want to be dependent on them to make our medicine or technically critical components for defense, for example.
SO - how do we encourage that good outcome? - We COULD employ a low salary strategy to compete directly with 'slave wages' rates, OR we could make the stuff produced by "slave labor" cost just as much as the same things we build here at our large rates - but our standard of living would suffer.
SO - as I see it, tariffs would encourage us to build and market this stuff HERE - rather than unloading it off a boat from China. AND - in the act of creating more structures and power to run the new factories, we would then incite a whole lot of OTHER beneficial ancillary job-producing activity.
To me it is a way to combat slave wages in other countries being an advantage to that country in debasing OUR economy while make US dependent on THEM for critical items - which they could, in time of war or other hostility, hold us hostage.
IF the tariff makes it too expensive to buy, then that means it is not worth the cost of making it here. I am willing to struggle getting by without plastic Christmas presents.
I would like to see much MORE of a tariff driven economy - combined with additional consumption taxes for our national revenue generation needs.
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