historian said:

---

The U.S. has the largest economy in human history since 1900. We most definitely were an economic world power at the time but not militarily and not so much politically because we chose not to use our international political power very much. WWI changed things a little since the US was the decisive factor in the allied victory even though we were not a filly ally in the legal sense (no treaty). It didn't really change until the end of WWII.

Moving to tariff only is unrealistic for multiple reasons. The world is so different than it was 100 years ago it's ridiculous to think we could go back. It's not in our interest to pull back that radically from world affairs. We must remain involved to some extent. That does not mean we need to have military forces in 100+ countries, fight ridiculous & costly "forever wars", or give billions to countries like Ukraine to maintain such a war. Domestically, we probably do need a drastic curtailment but will almost certainly not happen. That's where the budget will be brought under control and the economy turned back towards long term prosperity.

The budget must be balanced and the debt reduced. That is an imperative.

---

We agree on Tariffs.

I am all for not fighting forever wars. But, I do want the US to have a presence in the 100+ Nations. Special Operations does an excellent job of providing the presence with advisors and task forces there for a specific purpose. I think Africa is a prime example of a model, at least I like it, that works and is cost efficient.

For example, of some military spending that I think show the potential value of DOD, besides basic defense and war fighting.

The Anti-Piracy Task Force in the Horn of Africa. There for a specific purpose that supports freedom of navigation. Multi-National and provides benefit as well as presence. Think it is an example of the US Military at its best modern use.

Advisors, specially trained to provide and teach how the US military operates and force multipliers. Worth the money invested.

USAF Pararescue - Premier Paramedics in the world, they serve a purpose under any conditions. See the Earthquakes in Northern Calf those guys went underground to rescue people. A story that did not get enough press.

Freedom of Navigation - This is what our Destroyers were made to accomplish. I support this fully.

Anti-Terror Units - Not massive deployments, but targeted protection. Would like to see more on Border.

I am sure there are more, just the ones that I see.

FLBear5630 said:

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historian said:

---

The U.S. has the largest economy in human history since 1900. We most definitely were an economic world power at the time but not militarily and not so much politically because we chose not to use our international political power very much. WWI changed things a little since the US was the decisive factor in the allied victory even though we were not a filly ally in the legal sense (no treaty). It didn't really change until the end of WWII.

Moving to tariff only is unrealistic for multiple reasons. The world is so different than it was 100 years ago it's ridiculous to think we could go back. It's not in our interest to pull back that radically from world affairs. We must remain involved to some extent. That does not mean we need to have military forces in 100+ countries, fight ridiculous & costly "forever wars", or give billions to countries like Ukraine to maintain such a war. Domestically, we probably do need a drastic curtailment but will almost certainly not happen. That's where the budget will be brought under control and the economy turned back towards long term prosperity.

The budget must be balanced and the debt reduced. That is an imperative.

---

We agree on Tariffs.

I am all for not fighting forever wars. But, I do want the US to have a presence in the 100+ Nations. Special Operations does an excellent job of providing the presence with advisors and task forces there for a specific purpose. I think Africa is a prime example of a model, at least I like it, that works and is cost efficient.

For example, of some military spending that I think show the potential value of DOD, besides basic defense and war fighting.

The Anti-Piracy Task Force in the Horn of Africa. There for a specific purpose that supports freedom of navigation. Multi-National and provides benefit as well as presence. Think it is an example of the US Military at its best modern use.

Advisors, specially trained to provide and teach how the US military operates and force multipliers. Worth the money invested.

USAF Pararescue - Premier Paramedics in the world, they serve a purpose under any conditions. See the Earthquakes in Northern Calf those guys went underground to rescue people. A story that did not get enough press.

Freedom of Navigation - This is what our Destroyers were made to accomplish. I support this fully.

Anti-Terror Units - Not massive deployments, but targeted protection. Would like to see more on Border.

I am sure there are more, just the ones that I see.

---

Agreed.

It depends on the nature of America's military presence in dozens of countries. I have no problem with the kinds of deployments in your examples. Those are all excellent and important uses of American military power. Even Obama was correct in going after the Somali pirates, perhaps the only correct decision he made in 8 years!

I do not want to put American forces at risk needlessly in the more dangerous parts of the world acting as tripwires for potential forever wars.

FLBear5630 said:

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whiterock said:

---

FLBear5630 said:

---

historian said:

---

For most of our country’s history

the federal government was funded by tariffs, there was no income tax, the budget was (mostly) balanced, and federal spending was less than 10% of GDP. pic.twitter.com/vyxL9LTT9A

— Thomas Massie (@RepThomasMassie) November 15, 2024

I don't think this will work today. It is a useful reminder, though.

---

I agree. Defense alone will be more than Tariffs can generate. There are also more choices in the market than before, Asia did not exist as a market (at least a competitive market). Finally, look at the US status in the world during that time. The US was not a world power economically, financially or militarily.

Serious question, is that where the US wants to go? If we move to Tariff only, it will be an extreme cut to pretty much everything the US has been since 1939. Many on this Board think that would be great, I am not sure they understand what that means in practice.

---

Think of tariffs are a defacto Value Added Tax. Pick a tariff rate and multiply by the percentage of the economy involved in trade....voila, you have a revenue number, imbedded in the final cost of one or more layers of finished goods. That is what Trump is looking at. it's a quick & easy revenue booster.

We will not replace the income tax with tariffs. We will add tariffs to the mix. I'm not a particular fan of that. Just noting what is most likely to happen.

---

I agree it will be a combination, Income Tax is not going away.

I don't agree a Tariff is nothing more than VAT. Tariff's are more regulatory, targeted and based on Country of Origin. I am not a fan of VAT, unless you get rid of everything else. Having VAT and Income Tax seems to me to be a double hit.

I can't see Tariff's, in the modern day, being an efficient revenue producer. Much more of a behavior influencer.

---

Here's a simple macroeconomics 101 exercise. The US economy is 25% trade related, so a 10% tariff would be roughly equivalent to a 10% sales tax on a quarter of US GDP. Here's what that would look like:
$28T (GDP) x .25 (trade percentage) = $7T (trade sector) x 10% (tariff rate) = $700B tax revenue (almost 40% of the $1.8T budget deficit). That's a pretty big chunk of a pretty big problem. Explains why Trump is talking about it. He can raise a lot of revenue without reducing anyone's paycheck and get revenue equivalent to net 2.5% of GDP.

Tariffs are conceptually similar to a VAT in that much of them are imbedded deep in the cost, i.e. not all of that nominal import sector number represents completely finished goods manufactured abroad that are straight up imported to the USA. There are a huge number of domestically manufactured goods which have some percentage of imported content....from raw materials, to a key components, all the way thru to packaging. That's kinda/sorta the way a VAT works = imbedded down inside the cost structure - goods are taxed every time they are touched from being dug from the ground to set on the table at home (only VAT has multiple layers where tariffs in most cases would be a one-time event).

VAT is insidious precisely because it is invisible. It's impossible for the consumer to know how much tax he/she is paying.
Same for tariffs.

whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

historian said:

---

For most of our country’s history

the federal government was funded by tariffs, there was no income tax, the budget was (mostly) balanced, and federal spending was less than 10% of GDP. pic.twitter.com/vyxL9LTT9A

— Thomas Massie (@RepThomasMassie) November 15, 2024

I don't think this will work today. It is a useful reminder, though.

---

I agree. Defense alone will be more than Tariffs can generate. There are also more choices in the market than before, Asia did not exist as a market (at least a competitive market). Finally, look at the US status in the world during that time. The US was not a world power economically, financially or militarily.

Serious question, is that where the US wants to go? If we move to Tariff only, it will be an extreme cut to pretty much everything the US has been since 1939. Many on this Board think that would be great, I am not sure they understand what that means in practice.

---

Think of tariffs are a defacto Value Added Tax. Pick a tariff rate and multiply by the percentage of the economy involved in trade....voila, you have a revenue number, imbedded in the final cost of one or more layers of finished goods. That is what Trump is looking at. it's a quick & easy revenue booster.

We will not replace the income tax with tariffs. We will add tariffs to the mix. I'm not a particular fan of that. Just noting what is most likely to happen.

---

I agree it will be a combination, Income Tax is not going away.

I don't agree a Tariff is nothing more than VAT. Tariff's are more regulatory, targeted and based on Country of Origin. I am not a fan of VAT, unless you get rid of everything else. Having VAT and Income Tax seems to me to be a double hit.

I can't see Tariff's, in the modern day, being an efficient revenue producer. Much more of a behavior influencer.

---

Here's a simple macroeconomics 101 exercise. The US economy is 25% trade related, so a 10% tariff would be roughly equivalent to a 10% sales tax on a quarter of US GDP. Here's what that would look like:
$28T (GDP) x .25 (trade percentage) = $7T (trade sector) x 10% (tariff rate) = $700B tax revenue (almost 40% of the $1.8T budget deficit). That's a pretty big chunk of a pretty big problem. Explains why Trump is talking about it. He can raise a lot of revenue without reducing anyone's paycheck and get revenue equivalent to net 2.5% of GDP.

Tariffs are conceptually similar to a VAT in that much of them are imbedded deep in the cost, i.e. not all of that nominal import sector number represents completely finished goods manufactured abroad that are straight up imported to the USA. There are a huge number of domestically manufactured goods which have some percentage of imported content....from raw materials, to a key components, all the way thru to packaging. That's kinda/sorta the way a VAT works = imbedded down inside the cost structure - goods are taxed every time they are touched from being dug from the ground to set on the table at home (only VAT has multiple layers where tariffs in most cases would be a one-time event).

VAT is insidious precisely because it is invisible. It's impossible for the consumer to know how much tax he/she is paying.
Same for tariffs.

---

That assumes that everything remains the same. China, Canada and everyone else that Tariffs are imposed just say ok,we will pay. Charge whatever you want. What is the impact to imports? Do they develop.msrketd in Asia, India, EU? Those nations are already looking toward BRIC and creating a competing market option.

Trump will raise some tariffs based on whether he is pissed at those Nations, but income tax is staying. Sales tax will go up. VAT will not come to the US.

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

historian said:

---

For most of our country’s history

the federal government was funded by tariffs, there was no income tax, the budget was (mostly) balanced, and federal spending was less than 10% of GDP. pic.twitter.com/vyxL9LTT9A

— Thomas Massie (@RepThomasMassie) November 15, 2024

I don't think this will work today. It is a useful reminder, though.

---

I agree. Defense alone will be more than Tariffs can generate. There are also more choices in the market than before, Asia did not exist as a market (at least a competitive market). Finally, look at the US status in the world during that time. The US was not a world power economically, financially or militarily.

Serious question, is that where the US wants to go? If we move to Tariff only, it will be an extreme cut to pretty much everything the US has been since 1939. Many on this Board think that would be great, I am not sure they understand what that means in practice.

---

Think of tariffs are a defacto Value Added Tax. Pick a tariff rate and multiply by the percentage of the economy involved in trade....voila, you have a revenue number, imbedded in the final cost of one or more layers of finished goods. That is what Trump is looking at. it's a quick & easy revenue booster.

We will not replace the income tax with tariffs. We will add tariffs to the mix. I'm not a particular fan of that. Just noting what is most likely to happen.

---

I agree it will be a combination, Income Tax is not going away.

I don't agree a Tariff is nothing more than VAT. Tariff's are more regulatory, targeted and based on Country of Origin. I am not a fan of VAT, unless you get rid of everything else. Having VAT and Income Tax seems to me to be a double hit.

I can't see Tariff's, in the modern day, being an efficient revenue producer. Much more of a behavior influencer.

---

Here's a simple macroeconomics 101 exercise. The US economy is 25% trade related, so a 10% tariff would be roughly equivalent to a 10% sales tax on a quarter of US GDP. Here's what that would look like:
$28T (GDP) x .25 (trade percentage) = $7T (trade sector) x 10% (tariff rate) = $700B tax revenue (almost 40% of the $1.8T budget deficit). That's a pretty big chunk of a pretty big problem. Explains why Trump is talking about it. He can raise a lot of revenue without reducing anyone's paycheck and get revenue equivalent to net 2.5% of GDP.

Tariffs are conceptually similar to a VAT in that much of them are imbedded deep in the cost, i.e. not all of that nominal import sector number represents completely finished goods manufactured abroad that are straight up imported to the USA. There are a huge number of domestically manufactured goods which have some percentage of imported content....from raw materials, to a key components, all the way thru to packaging. That's kinda/sorta the way a VAT works = imbedded down inside the cost structure - goods are taxed every time they are touched from being dug from the ground to set on the table at home (only VAT has multiple layers where tariffs in most cases would be a one-time event).

VAT is insidious precisely because it is invisible. It's impossible for the consumer to know how much tax he/she is paying.
Same for tariffs.

---

That assumes that everything remains the same. China, Canada and everyone else that Tariffs are imposed just say ok,we will pay. Charge whatever you want. What is the impact to imports? Do they develop.msrketd in Asia, India, EU? Those nations are already looking toward BRIC and creating a competing market option.
Ever heard of "price theory?" The more China/Canada & everyone else pays, the higher the price of their goods rises. At some point, the price rises enough to where US producers become price competitive, which would then bring home those manufacturing jobs. Sure, if tariffs cause the return of manufacturing jobs, then the tariffs will no longer be much of a revenue producer. But new manufacturing jobs here expands payroll, which is taxable at considerably higher rates than tariffs.

Trump will raise some tariffs based on whether he is pissed at those Nations, but income tax is staying. Sales tax will go up. VAT will not come to the US.
Vat is bad. What Democrats had lined up to do had Harris won is far worse - wealth tax, drastic cuts to inheritance tax, etc......

---

China is a defacto "rust belt." There's not as much cost advantage from outsourcing there as there used to be. Lots of foreign investment there is just running out the clock on depreciation - it's profitable now because it's paid for, but it will not be profitable (or pragmatic) to reinvest in new capacity. Those companies will rehome much of their production.

In that sense, one can say globalism "worked." It leveled the playing field between the developed and the developing world ENOUGH that offshoring is not as nearly as compelling an option as it once was.

whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

historian said:

---

For most of our country’s history

the federal government was funded by tariffs, there was no income tax, the budget was (mostly) balanced, and federal spending was less than 10% of GDP. pic.twitter.com/vyxL9LTT9A

— Thomas Massie (@RepThomasMassie) November 15, 2024

I don't think this will work today. It is a useful reminder, though.

---

I agree. Defense alone will be more than Tariffs can generate. There are also more choices in the market than before, Asia did not exist as a market (at least a competitive market). Finally, look at the US status in the world during that time. The US was not a world power economically, financially or militarily.

Serious question, is that where the US wants to go? If we move to Tariff only, it will be an extreme cut to pretty much everything the US has been since 1939. Many on this Board think that would be great, I am not sure they understand what that means in practice.

---

Think of tariffs are a defacto Value Added Tax. Pick a tariff rate and multiply by the percentage of the economy involved in trade....voila, you have a revenue number, imbedded in the final cost of one or more layers of finished goods. That is what Trump is looking at. it's a quick & easy revenue booster.

We will not replace the income tax with tariffs. We will add tariffs to the mix. I'm not a particular fan of that. Just noting what is most likely to happen.

---

I agree it will be a combination, Income Tax is not going away.

I don't agree a Tariff is nothing more than VAT. Tariff's are more regulatory, targeted and based on Country of Origin. I am not a fan of VAT, unless you get rid of everything else. Having VAT and Income Tax seems to me to be a double hit.

I can't see Tariff's, in the modern day, being an efficient revenue producer. Much more of a behavior influencer.

---

Here's a simple macroeconomics 101 exercise. The US economy is 25% trade related, so a 10% tariff would be roughly equivalent to a 10% sales tax on a quarter of US GDP. Here's what that would look like:
$28T (GDP) x .25 (trade percentage) = $7T (trade sector) x 10% (tariff rate) = $700B tax revenue (almost 40% of the $1.8T budget deficit). That's a pretty big chunk of a pretty big problem. Explains why Trump is talking about it. He can raise a lot of revenue without reducing anyone's paycheck and get revenue equivalent to net 2.5% of GDP.

Tariffs are conceptually similar to a VAT in that much of them are imbedded deep in the cost, i.e. not all of that nominal import sector number represents completely finished goods manufactured abroad that are straight up imported to the USA. There are a huge number of domestically manufactured goods which have some percentage of imported content....from raw materials, to a key components, all the way thru to packaging. That's kinda/sorta the way a VAT works = imbedded down inside the cost structure - goods are taxed every time they are touched from being dug from the ground to set on the table at home (only VAT has multiple layers where tariffs in most cases would be a one-time event).

VAT is insidious precisely because it is invisible. It's impossible for the consumer to know how much tax he/she is paying.
Same for tariffs.

---

That assumes that everything remains the same. China, Canada and everyone else that Tariffs are imposed just say ok,we will pay. Charge whatever you want. What is the impact to imports? Do they develop.msrketd in Asia, India, EU? Those nations are already looking toward BRIC and creating a competing market option.
Ever heard of "price theory?" The more China/Canada & everyone else pays, the higher the price of their goods rises. At some point, the price rises enough to where US producers become price competitive, which would then bring home those manufacturing jobs. Sure, if tariffs cause the return of manufacturing jobs, then the tariffs will no longer be much of a revenue producer. But new manufacturing jobs here expands payroll, which is taxable at considerably higher rates than tariffs.

Trump will raise some tariffs based on whether he is pissed at those Nations, but income tax is staying. Sales tax will go up. VAT will not come to the US.
Vat is bad. What Democrats had lined up to do had Harris won is far worse - wealth tax, drastic cuts to inheritance tax, etc......

---

China is a defacto "rust belt." There's not as much cost advantage from outsourcing there as there used to be. Lots of foreign investment there is just running out the clock on depreciation - it's profitable now because it's paid for, but it will not be profitable (or pragmatic) to reinvest in new capacity. Those companies will rehome much of their production.

In that sense, one can say globalism "worked." It leveled the playing field between the developed and the developing world ENOUGH that offshoring is not as nearly as compelling an option as it once was.

---

Once again, Tariffs are not effective revenue tools. They are effective for behavior modification. I am not the only one, many conservatives too, that are not in favor of relying on tariffs to that extent.

Tariffs have failed before and ended up costing the US, see steel, aluminum and major appliances.

whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

historian said:

---

For most of our country’s history

the federal government was funded by tariffs, there was no income tax, the budget was (mostly) balanced, and federal spending was less than 10% of GDP. pic.twitter.com/vyxL9LTT9A

— Thomas Massie (@RepThomasMassie) November 15, 2024

I don't think this will work today. It is a useful reminder, though.

---

I agree. Defense alone will be more than Tariffs can generate. There are also more choices in the market than before, Asia did not exist as a market (at least a competitive market). Finally, look at the US status in the world during that time. The US was not a world power economically, financially or militarily.

Serious question, is that where the US wants to go? If we move to Tariff only, it will be an extreme cut to pretty much everything the US has been since 1939. Many on this Board think that would be great, I am not sure they understand what that means in practice.

---

Think of tariffs are a defacto Value Added Tax. Pick a tariff rate and multiply by the percentage of the economy involved in trade....voila, you have a revenue number, imbedded in the final cost of one or more layers of finished goods. That is what Trump is looking at. it's a quick & easy revenue booster.

We will not replace the income tax with tariffs. We will add tariffs to the mix. I'm not a particular fan of that. Just noting what is most likely to happen.

---

I agree it will be a combination, Income Tax is not going away.

I don't agree a Tariff is nothing more than VAT. Tariff's are more regulatory, targeted and based on Country of Origin. I am not a fan of VAT, unless you get rid of everything else. Having VAT and Income Tax seems to me to be a double hit.

I can't see Tariff's, in the modern day, being an efficient revenue producer. Much more of a behavior influencer.

---

Here's a simple macroeconomics 101 exercise. The US economy is 25% trade related, so a 10% tariff would be roughly equivalent to a 10% sales tax on a quarter of US GDP. Here's what that would look like:
$28T (GDP) x .25 (trade percentage) = $7T (trade sector) x 10% (tariff rate) = $700B tax revenue (almost 40% of the $1.8T budget deficit). That's a pretty big chunk of a pretty big problem. Explains why Trump is talking about it. He can raise a lot of revenue without reducing anyone's paycheck and get revenue equivalent to net 2.5% of GDP.

Tariffs are conceptually similar to a VAT in that much of them are imbedded deep in the cost, i.e. not all of that nominal import sector number represents completely finished goods manufactured abroad that are straight up imported to the USA. There are a huge number of domestically manufactured goods which have some percentage of imported content....from raw materials, to a key components, all the way thru to packaging. That's kinda/sorta the way a VAT works = imbedded down inside the cost structure - goods are taxed every time they are touched from being dug from the ground to set on the table at home (only VAT has multiple layers where tariffs in most cases would be a one-time event).

VAT is insidious precisely because it is invisible. It's impossible for the consumer to know how much tax he/she is paying.
Same for tariffs.

---

The problem with all taxes on producers (or importers) is that the people will pay it eventually. If taxes are raised on something, anything really, the producers who pay it will pass it on to the consumers who buy their products or services. In the end we all pay them. Taxes are inflationary too.

historian said:

---

whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

historian said:

---

For most of our country’s history

the federal government was funded by tariffs, there was no income tax, the budget was (mostly) balanced, and federal spending was less than 10% of GDP. pic.twitter.com/vyxL9LTT9A

— Thomas Massie (@RepThomasMassie) November 15, 2024

I don't think this will work today. It is a useful reminder, though.

---

I agree. Defense alone will be more than Tariffs can generate. There are also more choices in the market than before, Asia did not exist as a market (at least a competitive market). Finally, look at the US status in the world during that time. The US was not a world power economically, financially or militarily.

Serious question, is that where the US wants to go? If we move to Tariff only, it will be an extreme cut to pretty much everything the US has been since 1939. Many on this Board think that would be great, I am not sure they understand what that means in practice.

---

Think of tariffs are a defacto Value Added Tax. Pick a tariff rate and multiply by the percentage of the economy involved in trade....voila, you have a revenue number, imbedded in the final cost of one or more layers of finished goods. That is what Trump is looking at. it's a quick & easy revenue booster.

We will not replace the income tax with tariffs. We will add tariffs to the mix. I'm not a particular fan of that. Just noting what is most likely to happen.

---

I agree it will be a combination, Income Tax is not going away.

I don't agree a Tariff is nothing more than VAT. Tariff's are more regulatory, targeted and based on Country of Origin. I am not a fan of VAT, unless you get rid of everything else. Having VAT and Income Tax seems to me to be a double hit.

I can't see Tariff's, in the modern day, being an efficient revenue producer. Much more of a behavior influencer.

---

Here's a simple macroeconomics 101 exercise. The US economy is 25% trade related, so a 10% tariff would be roughly equivalent to a 10% sales tax on a quarter of US GDP. Here's what that would look like:
$28T (GDP) x .25 (trade percentage) = $7T (trade sector) x 10% (tariff rate) = $700B tax revenue (almost 40% of the $1.8T budget deficit). That's a pretty big chunk of a pretty big problem. Explains why Trump is talking about it. He can raise a lot of revenue without reducing anyone's paycheck and get revenue equivalent to net 2.5% of GDP.

Tariffs are conceptually similar to a VAT in that much of them are imbedded deep in the cost, i.e. not all of that nominal import sector number represents completely finished goods manufactured abroad that are straight up imported to the USA. There are a huge number of domestically manufactured goods which have some percentage of imported content....from raw materials, to a key components, all the way thru to packaging. That's kinda/sorta the way a VAT works = imbedded down inside the cost structure - goods are taxed every time they are touched from being dug from the ground to set on the table at home (only VAT has multiple layers where tariffs in most cases would be a one-time event).

VAT is insidious precisely because it is invisible. It's impossible for the consumer to know how much tax he/she is paying.
Same for tariffs.

---

The problem with all taxes on producers (or importers) is that the people will pay it eventually. If taxes are raised on something, anything really, the producers who pay it will pass it on to the consumers who buy their products or services. In the end we all pay them. Taxes are inflationary too.

---

So very true. So what are alternatives for the consumers? Services and producer companies can't be forced to eat the cost so what is the way out of the conundrum?

As Ben Franklin said, death & taxes are unavoidable. The solution is to have limited govt as the Founding Fathers envisioned do's that taxes could be kept to a minimum. Instead shag we have is bloated, wasteful, corrupt, & tyrannical. Today it resembles Big Brother more than what it's supposed to be.

historian said:

---

As Ben Franklin said, death & taxes are unavoidable. The solution is to have limited govt as the Founding Fathers envisioned do's that taxes could be kept to a minimum. Instead shag we have is bloated, wasteful, corrupt, & tyrannical. Today it resembles Big Brother more than what it's supposed to be.

---

So what are alternatives for the consumers? Services and producer companies can't be forced to eat the cost so what is the way out of the conundrum?

Waco1947

FLBear5630 said:

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whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

whiterock said:

---

FLBear5630 said:

---

historian said:

---

For most of our country’s history

the federal government was funded by tariffs, there was no income tax, the budget was (mostly) balanced, and federal spending was less than 10% of GDP. pic.twitter.com/vyxL9LTT9A

— Thomas Massie (@RepThomasMassie) November 15, 2024

I don't think this will work today. It is a useful reminder, though.

---

I agree. Defense alone will be more than Tariffs can generate. There are also more choices in the market than before, Asia did not exist as a market (at least a competitive market). Finally, look at the US status in the world during that time. The US was not a world power economically, financially or militarily.

Serious question, is that where the US wants to go? If we move to Tariff only, it will be an extreme cut to pretty much everything the US has been since 1939. Many on this Board think that would be great, I am not sure they understand what that means in practice.

---

Think of tariffs are a defacto Value Added Tax. Pick a tariff rate and multiply by the percentage of the economy involved in trade....voila, you have a revenue number, imbedded in the final cost of one or more layers of finished goods. That is what Trump is looking at. it's a quick & easy revenue booster.

We will not replace the income tax with tariffs. We will add tariffs to the mix. I'm not a particular fan of that. Just noting what is most likely to happen.

---

I agree it will be a combination, Income Tax is not going away.

I don't agree a Tariff is nothing more than VAT. Tariff's are more regulatory, targeted and based on Country of Origin. I am not a fan of VAT, unless you get rid of everything else. Having VAT and Income Tax seems to me to be a double hit.

I can't see Tariff's, in the modern day, being an efficient revenue producer. Much more of a behavior influencer.

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Here's a simple macroeconomics 101 exercise. The US economy is 25% trade related, so a 10% tariff would be roughly equivalent to a 10% sales tax on a quarter of US GDP. Here's what that would look like:
$28T (GDP) x .25 (trade percentage) = $7T (trade sector) x 10% (tariff rate) = $700B tax revenue (almost 40% of the $1.8T budget deficit). That's a pretty big chunk of a pretty big problem. Explains why Trump is talking about it. He can raise a lot of revenue without reducing anyone's paycheck and get revenue equivalent to net 2.5% of GDP.

Tariffs are conceptually similar to a VAT in that much of them are imbedded deep in the cost, i.e. not all of that nominal import sector number represents completely finished goods manufactured abroad that are straight up imported to the USA. There are a huge number of domestically manufactured goods which have some percentage of imported content....from raw materials, to a key components, all the way thru to packaging. That's kinda/sorta the way a VAT works = imbedded down inside the cost structure - goods are taxed every time they are touched from being dug from the ground to set on the table at home (only VAT has multiple layers where tariffs in most cases would be a one-time event).

VAT is insidious precisely because it is invisible. It's impossible for the consumer to know how much tax he/she is paying.
Same for tariffs.

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That assumes that everything remains the same. China, Canada and everyone else that Tariffs are imposed just say ok,we will pay. Charge whatever you want. What is the impact to imports? Do they develop.msrketd in Asia, India, EU? Those nations are already looking toward BRIC and creating a competing market option.
Ever heard of "price theory?" The more China/Canada & everyone else pays, the higher the price of their goods rises. At some point, the price rises enough to where US producers become price competitive, which would then bring home those manufacturing jobs. Sure, if tariffs cause the return of manufacturing jobs, then the tariffs will no longer be much of a revenue producer. But new manufacturing jobs here expands payroll, which is taxable at considerably higher rates than tariffs.

Trump will raise some tariffs based on whether he is pissed at those Nations, but income tax is staying. Sales tax will go up. VAT will not come to the US.
Vat is bad. What Democrats had lined up to do had Harris won is far worse - wealth tax, drastic cuts to inheritance tax, etc......

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China is a defacto "rust belt." There's not as much cost advantage from outsourcing there as there used to be. Lots of foreign investment there is just running out the clock on depreciation - it's profitable now because it's paid for, but it will not be profitable (or pragmatic) to reinvest in new capacity. Those companies will rehome much of their production.

In that sense, one can say globalism "worked." It leveled the playing field between the developed and the developing world ENOUGH that offshoring is not as nearly as compelling an option as it once was.

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Once again, Tariffs are not effective revenue tools. They are effective for behavior modification. I am not the only one, many conservatives too, that are not in favor of relying on tariffs to that extent.

Tariffs have failed before and ended up costing the US, see steel, aluminum and major appliances.

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LOL they are highly effective revenue generators until they offset the price advantage of imported goods, at which time they become highly effective at domestic job creation.

You do realize the USG ran almost exclusively on tariffs before the passage of the 16th amendment, don't you?

Any regulations, laws agencies been created since then, which can have a significant positive or negative influence? Just asking, since at least the tax code has had some changes since 1916.

Waco1947 said:

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historian said:

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As Ben Franklin said, death & taxes are unavoidable. The solution is to have limited govt as the Founding Fathers envisioned do's that taxes could be kept to a minimum. Instead shag we have is bloated, wasteful, corrupt, & tyrannical. Today it resembles Big Brother more than what it's supposed to be.

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So what are alternatives for the consumers? Services and producer companies can't be forced to eat the cost so what is the way out of the conundrum?

Waco1947

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Minimize the damage as much as possible and hold politicians accountable. This could be done by repealing the 16th amendment (income taxes) and instituting a national sales tax.

historian said:

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Waco1947 said:

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historian said:

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As Ben Franklin said, death & taxes are unavoidable. The solution is to have limited govt as the Founding Fathers envisioned do's that taxes could be kept to a minimum. Instead shag we have is bloated, wasteful, corrupt, & tyrannical. Today it resembles Big Brother more than what it's supposed to be.

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So what are alternatives for the consumers? Services and producer companies can't be forced to eat the cost so what is the way out of the conundrum?

Waco1947

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Minimize the damage as much as possible and hold politicians accountable. This could be done by repealing the 16th amendment (income taxes) and instituting a national sales tax.

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The December nonfarm payrolls report showed a very healthy labor market: The US economy added over 250,000 jobs in the month, while the unemployment rate fell to 4.1%. That's the good news. The less good news is that the strong reading could prompt the Fed to keep rates higher for longer, some on Wall Street believe. From Yahoo News
Why did the market down on this good news?

This is how Washington really works:

GOP Senators are telling Tulsi Gabbard that the only way she has a chance to be confirmed is if she renounces her long-standing opposition to mass FBI/NSA domestic spying powers, and vows to support FISA Section 702:https://t.co/MQaKRSiP0X

— Glenn Greenwald (@ggreenwald) January 10, 2025

At least a few of yesterday's "solutions " are today's problems, as is our failure to abide by the advice of many of our founding fathers, including at least a few in the federalist papers.

Peter Thiel w/ some critical facts for incoming Trump administration:

- Fauci/NIH hid the truth
- NIH-funded research may have caused pandemic
-Virus researchers are not honest and their research is dangerous
-Speech was censored pic.twitter.com/YjrlZAz1iv

— Paul D. Thacker (@thackerpd) January 10, 2025

Sen. Lankford's claim that FISA Section 702 "has nothing to do with American citizens" is 100% false.

Prior to its 2008 enactment, the NSA/CIA needed warrants if a foreign target was talking to a US citizen. Sec 702 allows the USG to listen to Americans' calls without warrants. https://t.co/GmqAbnvUl7

— Glenn Greenwald (@ggreenwald) January 12, 2025