[slg]

It's just a sales tax. I don't know why people opposing tariffs never talk about them in this manner because sales taxes are something people innately understand if they have spent any time in the US and "tariffs" clearly aren't as well understood.

[ajmurmann]

It's worse than a sales tax. Tariffs have a few market-distorting effects that a sales tax doesn't.

* Domestic consumers and companies are incentivized to potentially go for the 2nd best product. This over time can impact productivity as the tooling will decline over time as inferior solutions are bought.

* Reduced competition. We've seen this with the 25% "chicken tax" on pickup trucks. Arguably one culprit in US automakers falling behind is that they had a protected market around pickup trucks where it was hard to impossible for foreign competition to keep them on their toes. So US automakers retreated more and more into this safe haven.

* Destruction of economies of scale: If everyone wants the entire supply chain to be replicated in their country, we obviously loose economies of scale and thus efficiency. This sounds like it would be small but having multiple Shenzhen's is just not viable and we'll have to deal with higher prices and less product choice.

* Galapagos island syndrome: Over time separation of markets can lead to incompatible technologies which amplifies all other points.

[lostlogin]

> Tariffs have a few market-distorting effects that a sales tax doesn't.

There are still stupid edge cases. The cake-versus-biscuit saga in the UK comes to mind.

https://en.m.wikipedia.org/wiki/Jaffa_Cakes

[ajmurmann]

Just double checking, you are saying reduced competition and scale economics are "stupid edge cases"?

[lostlogin]

I’m saying that using a courtroom to decide the definition of a biscuit indicates a problem with sales tax legislation.

Flat rate sales tax has its problems, but avoiding Jaffa cake situations is entirely desirable.

[ajmurmann]

Agreed, complex policies open the door for unintended consequences and have higher enforcement cost. If you do a sales tax or VAT it should be flat. If anyone thinks that it will be regressive or put poor people at a disadvantage, the answer IMO is UBI, even a small one can make up for sales tax on food while avoiding the deadweight loss from nonsense like that Jaffa cake nonsense.

[lostlogin]

> sales taxes are something people innately understand if they have spent any time in the US

The way they are done in the US is maddening. You go to the counter and find the price is higher than the tag price by some random amount. It seems to vary wherever you go and depend on what you buy.

A tariff might actually be better.

[peterfirefly]

There's actually a really good argument in favour of that -- and in favour of paying income tax not as a direct tax (withheld from wages) but with a delay.

It makes the taxes visible and painful and they will therefore (potentially) not rise as fast or as much.

[snotrockets]

It also puts more tax burden on the less wealthy. Sales tax is regressive; income tax is progressive.

But yes, that’s exactly why the American right makes taxation so cumbersome and horrible: to make people think that taxes are bad, as there’s this assumption you can have civilization without paying for it.

[milesskorpen]

I think that's an argument, but not necessarily a good one

Need to balance transparency in pricing vs. visibility of taxes. I don't think sales taxes are actually all that visible most of the time- it's not like the cashier is telling you "and your taxes are $X." But it does make it much harder to detect if the store is charging you more than list price.