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> "At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation." Assuming

> "At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation." Assuming this is true, which it may not be given that the deficit (not debt…) continues to rise despite the tariff revenues, it basically points to the fact that the US is cutting taxes on the richest and funding it with a federal sales tax on all.

twisterius 1y ago
How do you draw such a conclusion? Even an extremely progressive income tax cannot capture the earning channels that many wealthy individuals benefit from (especially when you consider unrealized gains and complex financial instruments). Tariffs are a consumption tax. Wealthy individuals tend to leverage their wealth to spend more money. Wealthy individuals own a larger share of businesses. Those businesses once again will bear the burden of these tariffs along with their consumers. Compare this to a payroll tax. This is a direct tax that scales as a company’s employee base scales. This directly harms employees by decreasing their salary. It also decreases the number of employees a company can hire. Compare this to a corporate income tax. This also increases prices and decreases employment. This is not much different than tariffs. However tariffs are targeted and create incentives to produce more within a nation (ie more domestic jobs). Tariffs also provide a counterbalance against companies outsourcing (a technique that depresses domestic wages and encourages financial creativity to dodge federal taxes by establishing foreign based entities (eg Double Irish Agreement)
esbranson 1y ago
If by "all" you mean "import companies", yes. While it is true that taxing companies is "passed on" to consumers, it's not an excuse to not tax companies.
- piva00 1y ago
  Import companies are part of many supply chains in the USA, that's what the push for globalisation by the USA since the 1990s created. In a sense it is almost "all", most products Americans consume depend on imported inputs. In the end the companies aren't taxed, they just pass the cost downwards to the consumer, it's a VAT with many extra steps.
RickJWagner 1y ago
Please explain, I don’t follow.

twisterius 1y ago

How do you draw such a conclusion? Even an extremely progressive income tax cannot capture the earning channels that many wealthy individuals benefit from (especially when you consider unrealized gains and complex financial instruments). Tariffs are a consumption tax. Wealthy individuals tend to leverage their wealth to spend more money. Wealthy individuals own a larger share of businesses. Those businesses once again will bear the burden of these tariffs along with their consumers. Compare this to a payroll tax. This is a direct tax that scales as a company’s employee base scales. This directly harms employees by decreasing their salary. It also decreases the number of employees a company can hire. Compare this to a corporate income tax. This also increases prices and decreases employment. This is not much different than tariffs. However tariffs are targeted and create incentives to produce more within a nation (ie more domestic jobs). Tariffs also provide a counterbalance against companies outsourcing (a technique that depresses domestic wages and encourages financial creativity to dodge federal taxes by establishing foreign based entities (eg Double Irish Agreement)

esbranson 1y ago

If by "all" you mean "import companies", yes. While it is true that taxing companies is "passed on" to consumers, it's not an excuse to not tax companies.

piva00 1y ago
Import companies are part of many supply chains in the USA, that's what the push for globalisation by the USA since the 1990s created. In a sense it is almost "all", most products Americans consume depend on imported inputs. In the end the companies aren't taxed, they just pass the cost downwards to the consumer, it's a VAT with many extra steps.

RickJWagner 1y ago

Please explain, I don’t follow.