7 ms·

In 2016 the US imported $416B and exported $270B to the EU. Although $11B is a large number, it's a 2.6% tax on the total. More interestingly, is what they are

In 2016 the US imported $416B and exported $270B to the EU. Although $11B is a large number, it's a 2.6% tax on the total. More interestingly, is what they are taxing. Personally, I'd rather have tariffs than income tax. At least then I can choose what to buy.

ganeshkrishnan 8y ago
I sell in US and I also support ecommerce sellers in US. Most of us have raised the prices of products to counter the tariffs. You are actually paying income tax as these tariffs. Some products which can be produced in US will benefit from tariffs. But the whole point of not having tariffs is to buy cheap labour from outside and move your own country up the value chain. Also, no one is going to start manufacturing these products because the next President is going to remove the tariffs and destroy the advantages, if any. Just my 2 cents.
latch 8y ago
Maybe this is naive, but don't tariffs, like subsidies, risk encouraging local inefficiencies? So your point of view seems shortsighted? I understand that in theory they can be used to capture externalities to level the playing field, but I find it hard to believe anyone can really figure anything close to the real amount of "unfairness" (for lack of a better word)
arcticbull 8y ago
Consumption taxes are regressive, income taxes are progressive. The poor are disproportionately impacted by tariffs and sales/consumption taxes. The administration is taking money out of the hands of Americans under a truly misguided idea of what a trade deficit is.
- pmorici 8y ago
  I don't think that is a given. If you put the consumption tax only on luxury goods it could be progressive. I doubt the poor are buying Rolex watches and if they are taxes aren't the problem.
  - goliatone 8y ago
    I lived in different countries where they had both taxes. I think what also makes a difference is how that tax money is spent. Also, what gets taxed as a luxury item can be interesting. Things I did not expect to be taxed as luxurious items like books or tampons
  - solatic 8y ago
    The poor may not be buying Rolex watches, but you can be sure that there are a lot of kids out there lusting after $400 basketball shoes. And you might be surprised at what counts as a luxury sometimes - liquor, steak, and other goods that even poor people can sometimes afford. If you start taxing luxury goods, all you do is put creature comforts further out of the reach of the majority. That is regressive.
- koolba 8y ago
  Depends on what you tax. A high tariff on imported caviar or luxury sedans isn’t going to impact Joe Sixpack.
- kenneth 8y ago
  Good. Given a fair tax system would be proportional / flat, perhaps a little imbalance in the other direction evens it all out towards flat / proportional tax (everyone at the same percentage)
  - jorblumesea 8y ago
    So, the people with the most money pay the same tax as those with a low income? That...doesn't sound fair at all. It's equality but not equity.
    - throwawaysea 8y ago
      The parent comment talked about a flat percentage tax. So the people with more money would not be paying the "same tax". They would still be paying a lot more. A truly fair tax would have everyone paying the same flat fee for the same public services rendered.
      - arcticbull 8y ago
        It isn’t, though, because of the marginal utility of money. Someone making $10k/yr sees much more value from an extra $10k than someone making $10M. For one it’s a lifeline and for one a rounding error. While a flat tax is fair in numbers it’s not fair in marginal value or utility. IMO that’s a much bigger deal. There are other macroeconomic advantages to giving the little guy the extra, though I don’t want to repeat myself so I’ll keep that in my sister reply. FWIW we’ve already got regressive taxes in the form of payroll tax, which kick in from $0 and cap out once you earn enough. So unless you’re unemployed, you’ve paid taxes even if your marginal income tax rate is 0%.
        throwawaysea 8y ago
        I feel you are reinventing definitions. The “same tax” would be very literally giving up the same value. The only common definition of value in society is currency - that is literally its role, to serve as a common measure (and storage) of utility. It does not confer net utility in and of itself (goods and services do), and therefore this argument of marginality doesn’t apply to it. I understand that goods and services acquired with currency can experience diminishing returns. But unless you think the rich and poor should be paying different amounts for every good and service (for example a cup of coffee), then I don’t think this is a consistent, principled argument. And once again, let me point out that GP’s comment on a flat tax would STILL mean the rich give up more value than the poor, and it would still not be a truly ‘fair’ tax. And on a side note, ‘progressive’/‘regressive’ are made up terms used to play rhetorical games by leveraging the negative connotation of the term ‘regressive’. A better set of neutral terms would be ‘uniform’ or ‘fair’ or ‘flat’ versus ‘non-uniform’ or ‘unfair’ or ‘graduated’.
- harry8 8y ago
  This is actually wrong and for reasons that surprised me when I found out and it does not require luxury taxation. Many? Most? People earning (say) $500k+ dodge their income tax, legally and illegally. There's a whole industry of it. Yes let's clamp down on that as we've been trying to across the world for decades. Not likely to eradicate it by next year though, right? So you tax consumption at a flat rate /in addition/ to income tax. You ensure the people earning less get a tax break or a transfer payment increase to cover the consumption flat tax and then some. All those wealthy people are now paying that base rate on their consumption in a way that is basically unavoidable. So for your progressive taxation, the initial bracket cannot be avoided. People in higher brackets still should pay more. By using consumption to tax the initial bracket the poor get an increase in after tax income. The rich (on average) get a higher tax bill. Yes it depends on the modelling and getting the implementation right as all tax regimes do. Yes it is progressive. When you see consumption tax as necessarily regressive (as I did once) you are missing the most important thing about them which is they really aren't. They're the best way of getting a big tax revenue increase at the expense of those who cheat. I like that, myself.
  - arcticbull 8y ago
    IMO if you're basing your tax model on people dodging half of it you've kind of missed the point. People willing to dodge taxes will dodge taxes one way or the other. Re: consumption tax, just buy stuff on Amazon, boom, taxes dodged. Or on eBay, receiving "gifts" from your seller. The solution isn't to invent a whole new parallel tax system so the dodgers pay a little instead of what they owe, the solution is to get the tax money back from the dodgers. The unpaid taxes on the amount of wealth squirreled away offshore by the wealthy right now would pay off the entire US national debt.
    - kmlx 8y ago
      “The unpaid taxes on the amount of wealth squirreled away offshore by the wealthy right now would pay off the entire US national debt.” without a source i call BS on this. us debt: 22 trillion. assuming 25% as median tax rate means that people in the US have more than 100 trillion USD stashed in offshore. to put this in context, top 50 US companies have around 3 trillion USD in offshore.
village-idiot 8y ago
Trade balances are a silly thing to measure in the 21st century when a lot of value moves around in the form of intangible services.

ganeshkrishnan 8y ago

I sell in US and I also support ecommerce sellers in US. Most of us have raised the prices of products to counter the tariffs. You are actually paying income tax as these tariffs. Some products which can be produced in US will benefit from tariffs. But the whole point of not having tariffs is to buy cheap labour from outside and move your own country up the value chain. Also, no one is going to start manufacturing these products because the next President is going to remove the tariffs and destroy the advantages, if any. Just my 2 cents.

latch 8y ago

Maybe this is naive, but don't tariffs, like subsidies, risk encouraging local inefficiencies? So your point of view seems shortsighted? I understand that in theory they can be used to capture externalities to level the playing field, but I find it hard to believe anyone can really figure anything close to the real amount of "unfairness" (for lack of a better word)

arcticbull 8y ago

Consumption taxes are regressive, income taxes are progressive. The poor are disproportionately impacted by tariffs and sales/consumption taxes. The administration is taking money out of the hands of Americans under a truly misguided idea of what a trade deficit is.

pmorici 8y ago
I don't think that is a given. If you put the consumption tax only on luxury goods it could be progressive. I doubt the poor are buying Rolex watches and if they are taxes aren't the problem.
- goliatone 8y ago
  I lived in different countries where they had both taxes. I think what also makes a difference is how that tax money is spent. Also, what gets taxed as a luxury item can be interesting. Things I did not expect to be taxed as luxurious items like books or tampons
- solatic 8y ago
  The poor may not be buying Rolex watches, but you can be sure that there are a lot of kids out there lusting after $400 basketball shoes. And you might be surprised at what counts as a luxury sometimes - liquor, steak, and other goods that even poor people can sometimes afford. If you start taxing luxury goods, all you do is put creature comforts further out of the reach of the majority. That is regressive.
koolba 8y ago
Depends on what you tax. A high tariff on imported caviar or luxury sedans isn’t going to impact Joe Sixpack.
kenneth 8y ago
Good. Given a fair tax system would be proportional / flat, perhaps a little imbalance in the other direction evens it all out towards flat / proportional tax (everyone at the same percentage)
- jorblumesea 8y ago
  So, the people with the most money pay the same tax as those with a low income? That...doesn't sound fair at all. It's equality but not equity.
  - throwawaysea 8y ago
    The parent comment talked about a flat percentage tax. So the people with more money would not be paying the "same tax". They would still be paying a lot more. A truly fair tax would have everyone paying the same flat fee for the same public services rendered.
    - arcticbull 8y ago
      It isn’t, though, because of the marginal utility of money. Someone making $10k/yr sees much more value from an extra $10k than someone making $10M. For one it’s a lifeline and for one a rounding error. While a flat tax is fair in numbers it’s not fair in marginal value or utility. IMO that’s a much bigger deal. There are other macroeconomic advantages to giving the little guy the extra, though I don’t want to repeat myself so I’ll keep that in my sister reply. FWIW we’ve already got regressive taxes in the form of payroll tax, which kick in from $0 and cap out once you earn enough. So unless you’re unemployed, you’ve paid taxes even if your marginal income tax rate is 0%.
      - throwawaysea 8y ago
        I feel you are reinventing definitions. The “same tax” would be very literally giving up the same value. The only common definition of value in society is currency - that is literally its role, to serve as a common measure (and storage) of utility. It does not confer net utility in and of itself (goods and services do), and therefore this argument of marginality doesn’t apply to it. I understand that goods and services acquired with currency can experience diminishing returns. But unless you think the rich and poor should be paying different amounts for every good and service (for example a cup of coffee), then I don’t think this is a consistent, principled argument. And once again, let me point out that GP’s comment on a flat tax would STILL mean the rich give up more value than the poor, and it would still not be a truly ‘fair’ tax. And on a side note, ‘progressive’/‘regressive’ are made up terms used to play rhetorical games by leveraging the negative connotation of the term ‘regressive’. A better set of neutral terms would be ‘uniform’ or ‘fair’ or ‘flat’ versus ‘non-uniform’ or ‘unfair’ or ‘graduated’.
harry8 8y ago
This is actually wrong and for reasons that surprised me when I found out and it does not require luxury taxation. Many? Most? People earning (say) $500k+ dodge their income tax, legally and illegally. There's a whole industry of it. Yes let's clamp down on that as we've been trying to across the world for decades. Not likely to eradicate it by next year though, right? So you tax consumption at a flat rate /in addition/ to income tax. You ensure the people earning less get a tax break or a transfer payment increase to cover the consumption flat tax and then some. All those wealthy people are now paying that base rate on their consumption in a way that is basically unavoidable. So for your progressive taxation, the initial bracket cannot be avoided. People in higher brackets still should pay more. By using consumption to tax the initial bracket the poor get an increase in after tax income. The rich (on average) get a higher tax bill. Yes it depends on the modelling and getting the implementation right as all tax regimes do. Yes it is progressive. When you see consumption tax as necessarily regressive (as I did once) you are missing the most important thing about them which is they really aren't. They're the best way of getting a big tax revenue increase at the expense of those who cheat. I like that, myself.
- arcticbull 8y ago
  IMO if you're basing your tax model on people dodging half of it you've kind of missed the point. People willing to dodge taxes will dodge taxes one way or the other. Re: consumption tax, just buy stuff on Amazon, boom, taxes dodged. Or on eBay, receiving "gifts" from your seller. The solution isn't to invent a whole new parallel tax system so the dodgers pay a little instead of what they owe, the solution is to get the tax money back from the dodgers. The unpaid taxes on the amount of wealth squirreled away offshore by the wealthy right now would pay off the entire US national debt.
  - kmlx 8y ago
    “The unpaid taxes on the amount of wealth squirreled away offshore by the wealthy right now would pay off the entire US national debt.” without a source i call BS on this. us debt: 22 trillion. assuming 25% as median tax rate means that people in the US have more than 100 trillion USD stashed in offshore. to put this in context, top 50 US companies have around 3 trillion USD in offshore.

village-idiot 8y ago

Trade balances are a silly thing to measure in the 21st century when a lot of value moves around in the form of intangible services.