It shouldn't really need to be mentioned at this point, but sales taxes are extremely regressive. The burden is shouldered by people with lower incomes.
It should be obvious by now that the whole game is to shift cost and risk to the bottom 90% while shifting profit and wealth even further to loyalists among the top 0.1%.
Viewed through this lens, the whole program is remarkably internally consistent. Tariffs on imports, cuts to corporate taxes, capital gains taxes and estate taxes, indiscriminate across-the-board reductions of 50% or more to regulatory agencies, etc.
Aren’t tariffs just corporate taxes which are paid by big corps who import stuff built overseas?
At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.
Also the regulatory cuts are sorely needed at this point. It took longer to get regulatory approval for the Starship rocket than it did to actually build the rocket (the biggest and most complicated rocket ever built).
> Aren’t tariffs just corporate taxes which are paid by big corps who import stuff built overseas?
No, they're not "just" that. Those costs get passed onto the consumer in the form of higher prices. Corporations aren't going to eat the cost out of the goodness of their hearts.
> At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.
If a widget from China costs $100 because of tariffs, then American companies who make the same widget have no reason to undercut that since they know consumers have no other options -- effectively raising the price floor.
There are also issues with the "union workers get the money" because we're effectively stiffing the rest of the U.S. population in order to prop up a specific segment of the economy.
> Those costs get passed onto the consumer in the form of higher prices
Not necessarily. The burden of a tax depends on supply and demand price elasticity. If demand is relatively price inelastic, then consumers pay the tax. If it is relatively price elastic, then companies pay via lower profits or reduce supply.
>Those costs get passed onto the consumer in the form of higher prices.
ALL taxes are like this, you are just arguing against corporate taxes at this point.
By your logic we should just make the corporate tax rate 0% so that we can lower the cost of goods even more.
It’s mind boggling because the same people who lambasted Trump for lowering the corporate tax rate in his first term are now lambasting him for wanting to raise tariffs in his second. But these two actions effectively do the opposite of each other, so if you don’t like one you should be happy about the other.
But somehow people are upset about both.
Tariffs are a tax which have the benefit of basically targeting rich mega corps and incentivizing people to build locally and pay their citizens better wages.
The current system makes it financially infeasible to make most things in our own country because companies are forced to compete with foreign slave labor.
Also think of the carbon impact of shipping everything you buy across the entire world just so that you can take advantage of slave labor on the other side of the planet.
> It’s mind boggling because the same people who lambasted Trump for lowering the corporate tax rate
I never lambasted Trump for this and I don't think corporate taxes are particularly effective. I'd rather see something more on the "backend" of earning money like payroll or incomes taxes rather than corporate taxes. They seem like a huge drain for little gain. Especially since rates vary across countries so a corporation could move and game tax structures internationally.
All your arguments about carbon impacts, making things in the U.S. are fine but the whole Trump campaign was railing on how bad inflation has gotten but tariffs would have the worst inflationary impact on everyone. That and Republicans typically don't care about workers' rights or environmental impact so that seems a bit disingenuous to bring up.
Plus, there doesn't seem to be a solid foundation on why we want to bring back manufacturing to the U.S. since we generally want to strive for making more high tech stuff, no? If we suddenly start making lower-level widgets, where are we going to find enough workers to do that without a big influx of immigrants? Immigrants already work the jobs that Americans don't like farm hands.
>Plus, there doesn't seem to be a solid foundation on why we want to bring back manufacturing to the U.S.
Because the US used to have tons of good paying jobs for normal people who didn't need to get a 4 year degree. Everything used to be made here and we had a booming economy which had opportunities for people from all walks of life, including people who can't or don't want to get a 4 year degree.
>Republicans typically don't care about workers' rights or environmental impact
I think this is definitely not as true as many people think, the right has become a big tent at the moment and there are a lot of people in it who do care about these things. Workers rights do align with bringing jobs back to the US, look at how unions voted in the recent election, they superficially supported the left but most of their members voted for the right.
>where are we going to find enough workers to do that without a big influx of immigrants?
Wages go up, more people are able to live a middle class life, people have children.
Also, most of these jobs are becoming automated, your example of farm hands is a good one actually because a ton of farm work is now being done by robots. It won't be very much longer until almost every ag job is being done by robots. So bringing manufacturing back to the US means that the money stays here, people get better wages, and we have a way lower carbon footprint.
And yes, fewer people are employed because of robots but also SOME will still be employed.
We have been hollowing out the middle class by shipping many good jobs building stuff so that the top 1% can take advantage of slave labor on the other side of the planet. It was not a great idea.
Look at how much of a boon it has been for China, they have used the base of manufacturing jobs to bootstrap their entire economy in record time. Now they have so much manufacturing expertise they are able to do things we physically cannot, but we used to be able to build everything.
The American consumers do have other options — other American companies. Who are all held to a higher standard than foreign companies due to sharing a regulatory environment.
So the price may go up, but it will eventually tend toward the natural floor, even if higher than before, taking into account the externalities that were ignored with foreign widgets such as poor working conditions and environmental disregard that happens in certain other countries.
> American companies will never go below whatever the Chinese widget costs
Why not? If there are 3 American companies with similar costs, would all of them just say “well, the price is the price?” Or would there eventually be one who realizes they can take more market share from the Chinese companies by undercutting them?
> At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.
We could frame this another way - if every state in the US enacted tariffs on every other state, would we all be collectively richer or poorer?
Maybe some states could set up their own cottage automotive industry, but overall there is going to be more deadweight loss to the economy than revenue made by the tariffs.
It depends… do the states share a common set of laws and values? Do the benefits of one state profiting transfer in part to other states? Is there a course for grievances to be settled across state lines with reciprocal legal coverage guaranteed? Are living and working standards reasonably similar, allowing companies to fairly compete across state lines?
Those statements are generally not true across countries, but generally are true across states within a country. Things like working standards across countries mean that another country can employ slaves and have uncompetitive costs due to free labor, causing an unfair environment for those same companies forming in countries without slave labor. That is much less likely within the same country.
So it’s not necessarily the same to frame tariffs across states to be similar to tariffs on other countries. There are meaningful differences that make it harder to ensure similar standards across countries, which can make tariffs be meaningful. It helps to account for externalities inherent to lacking the protections mentioned in the first paragraph.
You simply make basic necessities sales tax free. Fresh foods (non-processed), education materials and tuition, medical premiums, and the first $1K of housing per month, and problem solved. It's an easier tax to enforce and requires a smaller surveillance state. Instead of attempting to audit 350 million individuals the revenue dept can just focus on a couple million businesses. Instead of pouring over 15000 pages of write-offs and exemptions, it's a simple % of taxable revenue. The states that run on sales tax alone are more affordable than states that run off income tax. It's a superior tax in every way.
Sales tax is not regressive per se. It's just much less progressive than an income tax. Rich people still pay more overall since they spend more money.
An example of a regressive tax would be something like cigarette taxes - poor people would actually spend a larger share of their income since they are also more likely to smoke.
This is a very unpopular opinion, but I believe ideally taxes in America should be more a lot more "regressive" like they are in Sweden. VATs are economically more efficient than income tax, and harder for corporations to avoid. Taxes are only actually regressive when the tax dollars don't go back into social services for the people, so that's something that would need to be prioritized first. I suspect that a major reason why the American government is so inefficient with spending is because there is no incentive for them to be, as the majority of tax dollars comes from a minority of high income workers.
Viewed through this lens, the whole program is remarkably internally consistent. Tariffs on imports, cuts to corporate taxes, capital gains taxes and estate taxes, indiscriminate across-the-board reductions of 50% or more to regulatory agencies, etc.