Trump Floats One Weird Idea To Replace The U.S. Income Tax

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Former president Donald Trump on Thursday raised the prospect of scrapping the U.S. income tax system and replacing it with something very different: much higher tariffs on imported goods.

Trump has for some time proposed an across-the-board 10% increase in tariffs for imports, but his comments implied far, far heavier trade duties that would likely be passed on to consumers. The campaign of President Joe Biden immediately pounced on the idea as hurting U.S. families.

Trump floated the idea while talking to House Republicans near the U.S. Capitol in what was described as a freewheeling “pep talk” in his first visit to the Capitol campus since the Jan. 6, 2021, insurrection.

“Most intriguing policy idea from the GOP meeting at the Capitol Hill Club this morning: Trump briefly floated the concept of eliminating the income tax and replacing it with tariffs,” said Rep. Thomas Massie (R-Ky.) in a social media post, adding a monocle-clad emoji face at the end.

Citing sources inside the meeting, CNBC also reported Trump had raised the idea of an “all tariff policy.”

The consensus among economists is that tariffs jack up consumer prices because companies would need to charge more for goods and services to make up what they’re paying in tariffs. Economists have also said Trump’s other proposals for new levies would boost inflation in general. Inflation and the price of consumer goods have already become a major talking point ahead of the 2024 election, even as the economy has grown briskly.

Currently, tariffs bring in only a small portion of the $4.4 trillion in revenues the U.S. government brings in every year. According to the Treasury Department, annual Customs duties, which include tariff payments, amounted to $88.3 billion in the 2023 fiscal year. Income taxes, on the other hand, raised more than 20 times as much, $2.2 trillion.

To bring tariff revenues anywhere close to income tax levels would seem to require hefty boosts in tariffs well beyond the 10% Trump initially proposed.

Paul Krugman, the liberal New York Times columnist and winner of the Nobel Prize in economics, gave a quick estimate in a social media post: “I’ll have to write this up in detail, but my first-pass estimate is that this would require an *average* tariff rate of 133 percent.”

A request for comment to the Trump campaign was not immediately answered.

The Biden campaign, which has already hammered at Trump’s 10% across-the-board tariff idea, teed off on the idea, focusing on the regressive nature of it. While the U.S. progressive income tax code means poor families have no or little tax liabilities, tariffs by themselves would likely raise prices without any similar protections.

“The only people who benefit from this regressive, thoughtless policy are Trump’s billionaire donors, who get a windfall at the expense of working class Americans,” said James Singer, spokesperson for the Biden campaign.

“American families get higher costs, Trump’s rich donors get richer,” Singer said.

In one way, Trump’s idea would simply be a return to the past. Prior to the imposition of the income tax in 1913, tariffs were a main source of government revenue. But, according to the Congressional Research Service, they have not accounted for much more than 2% of federal revenues in 70 years.

Trump hinted at that idea by reportedly praising President William McKinley at the meeting Thursday.

Before getting to the White House, McKinley was a member of the House of Representatives and best known for the McKinley Tariff Act of 1890, which boosted tariffs by nearly 50% on imports.

The political blowback from the law was disastrous for McKinley and his fellow Republicans, though. They lost 93 seats in the House in the next election.
https://www.huffpost.com/entry/trumps-w ... 909e1dab23

TOS's other harebrained ideas is to drastically cut income taxes for the very wealthy and corporations.
Facts do not cease to exist because they are ignored.-Huxley
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ~ Louis Brandeis,

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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sig230 wrote: Fri Jun 14, 2024 6:48 pm Next time you are in a grocery store check where much of the produce comes from.
Yup according to USDA,
Between 2007 and 2021, the percent of U.S. fresh fruit and vegetable availability supplied by imports grew from 50 to 60 percent for fresh fruit and from 20 to 38 percent for fresh vegetables (excluding potatoes, sweet potatoes, and mushrooms). The import share increased by more than 20 percentage points during this period for 10 crops: asparagus, avocados, bell peppers, blueberries, broccoli, cauliflower, cucumbers, raspberries, snap beans, and tomatoes. The United States-Mexico-Canada Agreement (USMCA), implemented on July 1, 2020, continues NAFTA’s market access provisions for fruit and vegetables. In 2022, Mexico and Canada supplied 51 percent and 2 percent, respectively, of U.S. fresh fruit imports, and 69 percent and 20 percent, respectively, of U.S. fresh vegetable imports in terms of value.
https://www.ers.usda.gov/data-products/ ... tId=107008

Tariffs aren't the answer for every industry. Usual fractured economics from Trump . In the US we grow a lot of root vegetables (potatoes, onions, sweet potatoes, carrots...) and CA and the southwest states grow a lot of fresh vegetables but not enough to supply the whole US.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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Eliminating income taxes and shifting to an “all-tariff policy” would leave a roughly $2.1 trillion gap in government revenue, making daily costs skyrocket in turn, according to Caleb Silver, editor-in-chief of Investopedia. Former President Donald Trump proposed an all-tariff policy that would eliminate income tax during a private meeting with Republican lawmakers in Washington, D.C., on Thursday. The Biden administration has upheld and even increased some of the Trump-era tariffs, but a blog from Tax Foundation posits that their overall impact on inflation is “relatively small.” An “all-tariff” system would change that dramatically.

“President Donald Trump’s idea of imposing tariffs in order to abolish income tax could raise taxes for a typical American family by $5,000, according to an economist from the Center for American Progress Action Fund,” Newsweek reported. While no income tax would make paychecks look a whole lot more appealing, Silver said the taxed companies’ financial burden would simply shift to everyday goods through higher prices, making the United States’ cost of living rise astronomically. Robert Reich, a former United States secretary of labor under Bill Clinton and current U.C. Berkeley professor, estimated an additional cost of $1,500 per year. “Trump has proposed a 10% tariff on all imported goods and a 60% or more tariff on Chinese imports.

No matter what he says, tariffs aren’t paid by the other country. They’re paid by you,” Reich shared on LinkedIn. Those tariffs on imported goods would have to be massive to maintain current revenue. Silver said the U.S. government took in around $2.3 trillion in income taxes last year and only $80 billion in customs taxes. That massive gap leaves consumers open to price gouging and higher taxes. NYU law professor David Kamin pointed out the disproportionate effect an “all-tariff” policy would have on the average American. “Here’s the thing: The income tax has its flaws. But, the bottom line is it raises ~$2.5 trillion per year in progressive fashion. Broadly substituting tariffs for income tax is a sure way to hit hard low and middle income Americans and reward top,” Kamin shared on X, formerly known as Twitter.

The same day he proposed his “all-tariff” solution, Trump told a group of chief executives that he wants to cut the corporate tax rate down one percentage point to 20%, according to three anonymous sources quoted in the New York Times. A former senior policy adviser at the White House National Economic Council in the Biden administration, Brendan Duke, told Newsweek: “Donald Trump has released multiple economic plans, but they all have one bottom line: paying for tax cuts for billionaires and corporations by raising taxes on American families.” Eventually, Silver predicts that consumers will simply “tap out” if prices rise too much. The “all-tariff” solution, he said, is not one at all.
https://www.newsnationnow.com/business/ ... x-finance/
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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TOS follows the Leona Helmsley quote, "We don't pay taxes; only the little people pay taxes." TOS believes he is above the law and can do as he pleases because he is special. He has had someone bail him out since he was a child. Joins dad makes a deal with a podiatrist t keep Donnie out of the draft. Also pulls strings to get him into university, where TOS didn’t really learn anything of moral values. Later had Roy Cohn, AKA Lawyer for the Mafia, to keep TOS it f major trouble, but not bankruptcy multiple times. TOS only cares about TOS.
Facts do not cease to exist because they are ignored.-Huxley
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ~ Louis Brandeis,

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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CDFingers wrote: Sun Jun 16, 2024 10:00 am "He usually has such great ideas..." LOL

The more money a person has, the less the cost of goods and services matters. I mean, a person individually can only consume so much. Thus, eliminating income tax and replacing the revenue with tariffs benefits only the rich. Surprise.

CDF
The problem is as always, willful ignorance.

And that is one of the three bases of the Christian Cult of Ignorance.


The other two bases are SOURCE matters. What the people I like and believe say is what I too must believe.

And Belief trumps evidence. This is the 'alternate facts' pathway; when the Sources says something that is true it IS TRUE.

In this case the SOURCE will say "I'm doing this for you; look at how much more you get to take home out of your paycheck!" The SOURCE says "I made you richer!" Because the SOURCE said it and the pay check is bigger that is TRUE.
To be vintage it must be older than me!
The next gun I buy will be the next to last gun I ever buy. PROMISE!
jim

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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sig230 wrote: Sun Jun 16, 2024 10:24 am
CDFingers wrote: Sun Jun 16, 2024 10:00 am "He usually has such great ideas..." LOL

The more money a person has, the less the cost of goods and services matters. I mean, a person individually can only consume so much. Thus, eliminating income tax and replacing the revenue with tariffs benefits only the rich. Surprise.

CDF
The problem is as always, willful ignorance.

And that is one of the three bases of the Christian Cult of Ignorance.

The other two bases are SOURCE matters. What the people I like and believe say is what I too must believe.

And Belief TRUMP'S evidence. This is the 'alternate facts' pathway; when the Sources says something that is true it IS TRUE.

In this case the SOURCE will say "I'm doing this for you; look at how much more you get to take home out of your paycheck!" The SOURCE says "I made you richer!" Because the SOURCE said it and the pay check is bigger that is TRUE.
FIFY :D
Facts do not cease to exist because they are ignored.-Huxley
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both." ~ Louis Brandeis,

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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Actually, I wouldn't mind seeing tariffs on imports from, say, Red China. They never should've gotten the favorable trade deals that they did get. Red China is an adversary, not a friend.

In many states, sales tax is either nonexistent or reduced on groceries. The same could apply to tariffs as well; either greatly reduced or (even better) just non-existent.
"SF Liberal With A Gun + Free Software Advocate"
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Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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I don’t mind tariffs but then let’s not pretend to support free trade. Tariffs are a legitimate tool in my opinion, but it definitely plays favorites in the way it’s normally applied. Fair would be an across the board tariff on all imports regardless of where it comes from or what the item is.
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"Resistance is futile. You will be assimilated!" Loquacious of many. Texas Chapter Chief Cat Herder.

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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CowboyT wrote: Mon Jun 17, 2024 11:53 am Actually, I wouldn't mind seeing tariffs on imports from, say, Red China. They never should've gotten the favorable trade deals that they did get. Red China is an adversary, not a friend.

In many states, sales tax is either nonexistent or reduced on groceries. The same could apply to tariffs as well; either greatly reduced or (even better) just non-existent.
How'd they get there? Well, "Saint" Reagan signed a bill that allowed companies to get tax advantages (like GE paying ZERO tax!) to move manufacturing off-shore. This allowed them to pay less in taxes, pay far less for labor, and, to Reagan's joy, damn near kill labor unions. This was an ideal for several nations, particularly China, but also Mexico, Singapore, Vietnam, Indonesia, and Philippines, to jump into the chasm that Reagan opened. Company after company contracted with China to make EVERYTHING from cheap navigation sextants, to plastic swimming pools, to everyone's cell phones via Apple. We allowed them to pull ahead in solar and wind generators, and instead looked to be mainly financial services and, of course, weapons.

Look at the latest China scandal: Boeing and Airbus had sub-contractors buy ersatz titanium for critical aircraft parts--like things that attach engines to wings!

Tariffs have to be implemented with a surgical scalpel, not a trumpian sledge hammer. For example: Somewhere around 1980 (I don't remember the exact year--maybe it was 1981) Harley-Davidson sued under the anti-Dumping law to have a tariff imposed on large Japanese motorcycles. Yeah, they were dumping for YEARS! And there were GREAT deals on New Old Stock bikes. I bought a '91 Venture Royale for significantly less than the '92 on the same dealer's floor--and the only difference was the color! H-D GOT their tariff on all Big-Japan bikes 700cc and greater. (Japan responded with lots of 699cc bikes they labeled as "700"s). H-D had been a mess under the poor mgt of AMC, and had been bought back. They responded by better construction, improved engines, better build quality, and HEAVILY marketed "Genuine Harley Accessories". It all worked SO well that H-D asked the Feds to end the tariff prematurely.

This is the kind of delicate economic surgery that the ignorant thuggish Felonious Trump will never EVER understand! HIS tariffs KILLED the soy been farmers, losing them their biggest buyer: China (What's wrong with China buying our non-military products?).
"Even if the bee could explain to the fly why pollen is better than shit, the fly could never understand."

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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CDFingers wrote: Mon Jun 17, 2024 2:30 pm Sales taxes and tariffs hurt the poor more than anything else, as both raise the price of goods for people who already live a marginal existence. We lucky ones who have jobs and/or pensions easily can afford both sales taxes and tariffs. But the poor cannot.

CDF
True to an extent. Not everyone on pensions can equally afford goods with or without tariffs.
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"Resistance is futile. You will be assimilated!" Loquacious of many. Texas Chapter Chief Cat Herder.

Re: Trump Floats One Weird Idea To Replace The U.S. Income Tax

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I’m not looking at his proposal at all. I was only looking at our use of tariffs in general. His proposal definitely isn’t equitable nor would it get the revenue needed. It’s rather unrealistic and would simply result in pressure or retaliation from countries that are hit by these tariffs. Ultimately might trigger another world wide depression like the one in the 1930’s.
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"Resistance is futile. You will be assimilated!" Loquacious of many. Texas Chapter Chief Cat Herder.

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