Another doozy from the felon Donald Trump:
In his meetings with the GOP, the orange one proposed replacing income tax with tariffs on imports. That's right, the idea that workers pay zero income tax, and the US treasury gets its coffers replenished by setting higher tariffs on imports (in excess of 100%). Even the idea of using some increased tariffs to fund some income tax cuts is risky, as tariffs and income tax serve two distinct purposes: one to fund government spending, the other to protect markets.
Consensus by economists would seem to be that the felon's latest idea would entirely regressive, sending back economic policy to the 19th century, and hitting low and middle-income families significantly while benefitting the rich.
Hopefully this will get the coverage it deserves and send his poll-numbers suitably downward, but given the US media is either in the thrall of their cult-leader or far too lenient on highlighting and disapproving of his otherwise abhorrent behaviour, I doubt it.
And this policy is from someone, if I remember correctly, who seemed to think that tariffs were a form of free money, that the US could just raise tariffs on Chinese imports, for example, and it would be the Chinese pay the tariffs: https://www.forbes.com/sites/johnbrinkley/2019/08/12/trump-still-doesnt-know-who-pays-tariffs/
To those that aren't clear on such matters: it is the importer who pays the tariffs.
E.g. China business X sells goods to US company Y at 100. The US gov't slaps a 20% tariff on the goods. US Company Y has to pay 120, paying 100 to the Chinese business X, and 20 to the US gov't.
The US company Y, if merely an intermediary, would then need to sell the goods into the US market at the higher price so as to recover the additional 20 that it has paid out in tariffs. So the end-user - usually low- and middle-income Joe Public - ends up paying the bill.
In his meetings with the GOP, the orange one proposed replacing income tax with tariffs on imports. That's right, the idea that workers pay zero income tax, and the US treasury gets its coffers replenished by setting higher tariffs on imports (in excess of 100%). Even the idea of using some increased tariffs to fund some income tax cuts is risky, as tariffs and income tax serve two distinct purposes: one to fund government spending, the other to protect markets.
Consensus by economists would seem to be that the felon's latest idea would entirely regressive, sending back economic policy to the 19th century, and hitting low and middle-income families significantly while benefitting the rich.
Hopefully this will get the coverage it deserves and send his poll-numbers suitably downward, but given the US media is either in the thrall of their cult-leader or far too lenient on highlighting and disapproving of his otherwise abhorrent behaviour, I doubt it.
And this policy is from someone, if I remember correctly, who seemed to think that tariffs were a form of free money, that the US could just raise tariffs on Chinese imports, for example, and it would be the Chinese pay the tariffs: https://www.forbes.com/sites/johnbrinkley/2019/08/12/trump-still-doesnt-know-who-pays-tariffs/
To those that aren't clear on such matters: it is the importer who pays the tariffs.
E.g. China business X sells goods to US company Y at 100. The US gov't slaps a 20% tariff on the goods. US Company Y has to pay 120, paying 100 to the Chinese business X, and 20 to the US gov't.
The US company Y, if merely an intermediary, would then need to sell the goods into the US market at the higher price so as to recover the additional 20 that it has paid out in tariffs. So the end-user - usually low- and middle-income Joe Public - ends up paying the bill.