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Started By
Message
Imagine the US government’s only source of revenue being tariffs.
Posted on 11/20/18 at 10:30 am
Posted on 11/20/18 at 10:30 am
I’ve been trying to learn more about tariffs. In my lifetime tariffs haven’t really been a major player in US economics. I’ve been reading 2 books that have given me different levels of perspective related to taxation and tariffs.
1.) JFK and the Reagan Revolution
2.) The Forgotten Man
I found this article that has me wondering what is Trumps next move especially with the mention of a new middle class tax cut.
Did you know this?
This is from this Forbes article LINK the author is which coauthored the first book mentioned above with Larry Kudlow, Trumps Director of his National Econimc Council.
It seems to be a strategy of putting the tax burden on the backs of those that want to do business with our vibrant nation versus the burden on the backs of the middle class. Who could disagree with that? I doubt we will see such a huge shift back to tariffs but I do think we may see more of a tariff based tax system more and more in the future. I think this is the “Trump Card” for Trumps re-election.
1.) JFK and the Reagan Revolution
2.) The Forgotten Man
I found this article that has me wondering what is Trumps next move especially with the mention of a new middle class tax cut.
Did you know this?
quote:
In fact, for one long stretch, from 1817 to 1861, the tariff was the only form of federal taxation. In the other periods prior to 1913 (when the income tax was enacted), the tariff was accompanied by a small list of sales taxes, mainly on alcohol.
This is from this Forbes article LINK the author is which coauthored the first book mentioned above with Larry Kudlow, Trumps Director of his National Econimc Council.
It seems to be a strategy of putting the tax burden on the backs of those that want to do business with our vibrant nation versus the burden on the backs of the middle class. Who could disagree with that? I doubt we will see such a huge shift back to tariffs but I do think we may see more of a tariff based tax system more and more in the future. I think this is the “Trump Card” for Trumps re-election.
This post was edited on 11/20/18 at 10:31 am
Posted on 11/20/18 at 10:41 am to tigereye58
In the general sense, whatever is taxed is discouraged. Would we rather discourage people from earning income (income tax) or would we rather discourage purchasing goods from other countries (thus encouraging purchasing from other Americans?)
Posted on 11/20/18 at 10:42 am to tigereye58
Do you know what happened in 1913?
Posted on 11/20/18 at 10:43 am to tigereye58
quote:
In fact, for one long stretch, from 1817 to 1861, the tariff was the only form of federal taxation
Much different world
quote:
It seems to be a strategy of putting the tax burden on the backs of those that want to do business with our vibrant nation versus the burden on the backs of the middle class.
Who pays for tariffs?
This post was edited on 11/20/18 at 10:48 am
Posted on 11/20/18 at 10:44 am to tigereye58
putting the question on whether taxing trade alone is a good idea aside, this doesn't seem like a realistic way to fund the government. at all.
This post was edited on 11/20/18 at 10:51 am
Posted on 11/20/18 at 10:45 am to tigereye58
The big issue with tariff based taxes, at least from the government’s perspective, is that it is not a reliable source of income.
It’s similar to Nevada’s budget which is balanced off sales tax and mining taxes. If tourism or mining goes into the toilet, they’re fricked.
LA has the same with oil to a degree but they have their fingers into pretty much every pie in addition to petroleum.
It’s similar to Nevada’s budget which is balanced off sales tax and mining taxes. If tourism or mining goes into the toilet, they’re fricked.
LA has the same with oil to a degree but they have their fingers into pretty much every pie in addition to petroleum.
Posted on 11/20/18 at 10:46 am to Jack Bauers HnK
Agreed. I can see some negatives too because it may put us too dependent on the foreign economies but what if we cut the middle class tax tax down to 10% up to the first 100k and left the tariffs in place? While prices may go up the middle class has more money in their pocket to pay those costs and those jobs stay in America.
Posted on 11/20/18 at 10:46 am to 90proofprofessional
quote:
doesn't seem like a realistic way to fund the government.
It is if you keep the government within a budget, and base the budget on Tariffs.
Taxation of citizens via income, property, etc to support a tax and spend government is not a realistic way to fund government.
Posted on 11/20/18 at 10:47 am to tigereye58
Imagine this.
Imagine that there are big companies out there whose biggest client base are there own employees.
I'm talking big massive companies ... and there are more than a few.
So imagine a company whose big client base is their own employees AND the Federal Government.
There are quite a few actually.
Imagine that there are big companies out there whose biggest client base are there own employees.
I'm talking big massive companies ... and there are more than a few.
So imagine a company whose big client base is their own employees AND the Federal Government.
There are quite a few actually.
Posted on 11/20/18 at 10:48 am to TaderSalad
Except the government doesn’t give a shite because they get their cut and it’s pretty much guaranteed.
With tariffs, if foreigners don’t want to trade here the money doesn’t come in.
With the taxes you are talking about, the government has a captive tax base. They can’t go anywhere short of going Galt.
With tariffs, if foreigners don’t want to trade here the money doesn’t come in.
With the taxes you are talking about, the government has a captive tax base. They can’t go anywhere short of going Galt.
Posted on 11/20/18 at 10:48 am to TaderSalad
quote:
It is if you keep the government within a budget
you might look into the size of the federal budget, and the value of total us imports
Posted on 11/20/18 at 10:49 am to tigereye58
I’m going to say this as nicely as I can.
This is stupid. Companies hit by tariffs raise their prices to compensate. Companies that are not affected by tariffs will also raise their prices because their competition’s prices are being manipulated by the government.
It’s a tax on foreign producers, but it’s a tax that ultimately gets passed down to the consumer... even if the consumer buys domestically.
Not even mentioning that it’s completely insufficient revenue generation by itself.
This is stupid. Companies hit by tariffs raise their prices to compensate. Companies that are not affected by tariffs will also raise their prices because their competition’s prices are being manipulated by the government.
It’s a tax on foreign producers, but it’s a tax that ultimately gets passed down to the consumer... even if the consumer buys domestically.
Not even mentioning that it’s completely insufficient revenue generation by itself.
This post was edited on 11/20/18 at 10:51 am
Posted on 11/20/18 at 10:54 am to 90proofprofessional
quote:it would be plenty to fund a reasonably sized government. It’s clearly not enough to support a bloated entitlement state
putting the question on whether taxing trade alone is a good idea, this doesn't seem like a realistic way to fund the government. at all.
Posted on 11/20/18 at 10:55 am to tigereye58
Many professional economists blame high tariffs on the Great Depression. I have found none of the mainstream economists that tout conventional wisdom on the reasons for the Great Depression mention income taxes.
As income taxes came on line tariffs did decrease. Before the Depression tariffs made up approximately 15% of federal tax revenue and the remaining revenue was made up by income taxes and other sources but mostly by income taxes. Prior to the 16th amendment and income taxes, tariffs made up most of the federal tax revenue. After the Depression and into 40's tariffs made up and continue to make up 1 to 2 percent of federal tax revenue.
Leading into the Depression it wasn't just tariffs that caused the Great Depression. It was the total impact of high income taxes combined with high tariffs.
Total taxes are the overarching issue.
The secondary issue is the type of tax and those fall into two broad categories, regressive taxes and progressive taxes.
I personally favor regressive taxes like the Fair Tax, sales taxes, VAT taxes and tariffs over progressive taxes like the income tax.
Regressive taxes tax consumers. Progressive taxes tax producers.
As income taxes came on line tariffs did decrease. Before the Depression tariffs made up approximately 15% of federal tax revenue and the remaining revenue was made up by income taxes and other sources but mostly by income taxes. Prior to the 16th amendment and income taxes, tariffs made up most of the federal tax revenue. After the Depression and into 40's tariffs made up and continue to make up 1 to 2 percent of federal tax revenue.
Leading into the Depression it wasn't just tariffs that caused the Great Depression. It was the total impact of high income taxes combined with high tariffs.
Total taxes are the overarching issue.
The secondary issue is the type of tax and those fall into two broad categories, regressive taxes and progressive taxes.
I personally favor regressive taxes like the Fair Tax, sales taxes, VAT taxes and tariffs over progressive taxes like the income tax.
Regressive taxes tax consumers. Progressive taxes tax producers.
Posted on 11/20/18 at 10:56 am to TaderSalad
quote:
Do you know what happened in 1913?
I do. So you’re saying that the year we shifted away from tariffs our economy started its decline?
“February 3 – The 16th Amendment to the United States Constitution is ratified, authorizing the Federal government to impose and collect income taxes.
April 8 – The Seventeenth Amendment to the United States Constitution is passed, dictating the direct election of senators.”
LINK
Lots of things changed. Tariffs were at 40% and cut down to 25% when the income tax was reintroduced. . Imagine that.
Posted on 11/20/18 at 11:00 am to LSUTIGER in TEXAS
quote:
it would be plenty to fund a reasonably sized government
maybe, maybe not
it doesn't approach funding ours without requiring a rate of taxation that would shut down most trade, leaving nothing to tax
sounds like the next project should obviously be to get to that level of reasonably-sized government before giving ourselves any more goodies
Posted on 11/20/18 at 11:17 am to Volatile
quote:
I’m going to say this as nicely as I can. This is stupid. Companies hit by tariffs raise their prices to compensate. Companies that are not affected by tariffs will also raise their prices because their competition’s prices are being manipulated by the government. It’s a tax on foreign producers, but it’s a tax that ultimately gets passed down to the consumer... even if the consumer buys domestically. Not even mentioning that it’s completely insufficient revenue generation by itself.
Thanks for being so nice. I’m interested in the debate and I’m trying to understand the pros and cons. Your points are good ones. But what if to compensate for that we cut the middle class tax rate down to 10%? Sure you pay more but it’s offset by paying less in taxes. I just find it odd that some are so closed minded to other options.
This post was edited on 11/20/18 at 11:28 am
Posted on 11/20/18 at 11:19 am to Volatile
quote:
but it’s a tax that ultimately gets passed down to the consumer... even if the consumer buys domestically.
Posted on 11/20/18 at 11:23 am to tigereye58
Also, the establishment of the Federal Reserve/Central Banking System.
Posted on 11/20/18 at 11:26 am to tigereye58
And foreign entanglements during that time period?
Hmmm.
Maybe President Eisenhower was onto something.
Hmmm.
Maybe President Eisenhower was onto something.
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