4 ms·

Are we getting income tax breaks then?

toomuchtodo 9mo ago
Oh no no, we still have tax cuts for the wealthy, $800B in debt servicing, and $1T/year in military spending to pay for. The tariffs were a regressive tax to compensate for the tax cuts for the wealthy.
Ajedi32 9mo ago
Even with 90B in tariffs collected this fiscal year (since October) the government still spent 600B more than they collected.[1][2] Tax cuts would be great, but if you cut taxes without cutting spending you're just borrowing that tax cut from future generations. (270B of that 600B hole is interest payments on debt incurred by previous generations doing exactly that to us.) [1] https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/ https://fiscaldata.treasury.gov/americas-finance-guide/gover... [2] https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/ https://fiscaldata.treasury.gov/americas-finance-guide/feder...
hypeatei 9mo ago
In two weeks, just like the DOGE checks. Mark your calendar, two weeks.
- throw0101d 9mo ago
  > In two weeks, just like the DOGE checks. Mark your calendar, two weeks. Is this before or after Infrastructure Week: * https://politicaldictionary.com/words/infrastructure-week/ https://politicaldictionary.com/words/infrastructure-week/
kelseyfrog 9mo ago
No. It's like punching yourself in the face and then taking Tylenol for the pain until your friends do what you want. It's psychotic, doesn't work, and they're probably not going to want to hang out until you get some help.
kshri24 9mo ago
Far from getting a break, you guys are paying tax on tax. You indirectly pay for import taxes every time your companies import raw materials needed to finish their goods (added value) and then that final value (cost of import + added value) has its own sales tax. AFAIK there are no input credits for US sales tax. Then you also have VAT but at least VAT is only on the added value. Income tax is way better as you can reduce the tax burden by including expenses/deductions. You cannot do the same for tariffs, sales tax and VAT as an end consumer. VAT is only beneficial to businesses as they can subtract inputs from outputs.
- spwa4 9mo ago
  Republicans elected a president on the promise of introducing a new tax. Can't make this shit up.
- AnthonyMouse 9mo ago
  > You indirectly pay for import taxes every time your companies import raw materials needed to finish their goods (added value) and then that final value (cost of import + added value) has its own sales tax. This isn't really any different than any other kind of taxes. You pay income tax and then pay sales tax using the money that was already taxed as income. The construction company pays sales tax when it buys a backhoe, which increases construction costs and therefore real estate prices, and then you pay property tax on the higher real estate prices, and make the bigger mortgage payment with money that was already taxed as income. The only way you'd really get something different with tariffs is if the supply chain for some product passes through the local country multiple times, i.e. it gets imported, exported and then imported again. Which probably happens occasionally but isn't the common case. Meanwhile how many times something is taxed isn't really the relevant thing. It's, how much in total are you paying in taxes? If you pay ~10% three times, that's not really any worse than paying ~33% once. It is, of course, worse than paying 10% once.
  - kshri24 9mo ago
    > This isn't really any different than any other kind of taxes. You pay income tax and then pay sales tax using the money that was already taxed as income It definitely does make a huge difference. From sibling comment I got to know US does not even have VAT. It only makes the situation worse as the businesses operating in US cannot offset input credits against their output liability as Sales Tax has no such concept. So you are paying tax-on-tax-on-tax all the way to your raw materials that have been imported APART from paying tariffs. No wonder prices are so jacked up in US and to compensate that, you all have inflated salaries. The US Government is fleecing its citizens dry. Please study how VAT/GST works in EU/India/Australia and compare it with Sales Tax regime in US and you will know why Sales Tax is so bad. > Meanwhile how many times something is taxed isn't really the relevant thing. It's, how much in total are you paying in taxes? If you pay ~10% three times, that's not really any worse than paying ~33% once. It is, of course, worse than paying 10% once. You are not paying 10% three times. Assuming raw material was imported at $X + %10 of $X (tariff is 10%), value add was say $10, then the IRS is collecting say sales tax of 10% of the total value: 10 % of (($X + %10 of $X) + $10). Now this is just the simplest chain where raw material -> imported by manufacturer -> sold directly to consumer. But that is not how it is done. You typically buy from a retailer who buys from a dealer who buys from a wholesaler/manufacturer. So that would be 10% every time ON THE FULL VALUE (not just on value added). To demonstrate a simple raw material -> imported by manufacturer with value added -> sold to dealer/distributor -> sold to retailer -> sold to customer, this is what it would look like: 1. Imported by manufacturer: $X + %10 of $X 2. Value added ($10) and sold to dealer/distributor: 10 % of (($X + %10 of $X) + $10) 3. Dealer stocking/shipping charges added (say $10 again) and sold to retailer: 10% of (10 % of (($X + %10 of $X) + $10) + $10). 4. Retailer stocking/service charges added (say $10 again) and sold to consumer: 10% of (10% of (10 % of (($X + %10 of $X) + $10) + $10) + $10). The longer the chain, the more tax-on-tax you are paying (in some cases the total final tax can even go above the actual cost of making the product). This nonsense is solved by VAT/GST where the tax you pay for acquiring raw material or processed inputs comes back to you as input credits, which you can use to offset your output tax liability. There is no compounding of tax in VAT/GST. EDIT: added an example for more clarity

Oh no no, we still have tax cuts for the wealthy, $800B in debt servicing, and $1T/year in military spending to pay for. The tariffs were a regressive tax to compensate for the tax cuts for the wealthy.

Ajedi32 9mo ago

Even with 90B in tariffs collected this fiscal year (since October) the government still spent 600B more than they collected.[1][2] Tax cuts would be great, but if you cut taxes without cutting spending you're just borrowing that tax cut from future generations. (270B of that 600B hole is interest payments on debt incurred by previous generations doing exactly that to us.) [1] https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/ https://fiscaldata.treasury.gov/americas-finance-guide/gover... [2] https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/ https://fiscaldata.treasury.gov/americas-finance-guide/feder...

hypeatei 9mo ago

In two weeks, just like the DOGE checks. Mark your calendar, two weeks.

throw0101d 9mo ago
> In two weeks, just like the DOGE checks. Mark your calendar, two weeks. Is this before or after Infrastructure Week: * https://politicaldictionary.com/words/infrastructure-week/ https://politicaldictionary.com/words/infrastructure-week/

kelseyfrog 9mo ago

No. It's like punching yourself in the face and then taking Tylenol for the pain until your friends do what you want. It's psychotic, doesn't work, and they're probably not going to want to hang out until you get some help.

kshri24 9mo ago

Far from getting a break, you guys are paying tax on tax. You indirectly pay for import taxes every time your companies import raw materials needed to finish their goods (added value) and then that final value (cost of import + added value) has its own sales tax. AFAIK there are no input credits for US sales tax. Then you also have VAT but at least VAT is only on the added value. Income tax is way better as you can reduce the tax burden by including expenses/deductions. You cannot do the same for tariffs, sales tax and VAT as an end consumer. VAT is only beneficial to businesses as they can subtract inputs from outputs.

spwa4 9mo ago
Republicans elected a president on the promise of introducing a new tax. Can't make this shit up.
AnthonyMouse 9mo ago
> You indirectly pay for import taxes every time your companies import raw materials needed to finish their goods (added value) and then that final value (cost of import + added value) has its own sales tax. This isn't really any different than any other kind of taxes. You pay income tax and then pay sales tax using the money that was already taxed as income. The construction company pays sales tax when it buys a backhoe, which increases construction costs and therefore real estate prices, and then you pay property tax on the higher real estate prices, and make the bigger mortgage payment with money that was already taxed as income. The only way you'd really get something different with tariffs is if the supply chain for some product passes through the local country multiple times, i.e. it gets imported, exported and then imported again. Which probably happens occasionally but isn't the common case. Meanwhile how many times something is taxed isn't really the relevant thing. It's, how much in total are you paying in taxes? If you pay ~10% three times, that's not really any worse than paying ~33% once. It is, of course, worse than paying 10% once.
- kshri24 9mo ago
  > This isn't really any different than any other kind of taxes. You pay income tax and then pay sales tax using the money that was already taxed as income It definitely does make a huge difference. From sibling comment I got to know US does not even have VAT. It only makes the situation worse as the businesses operating in US cannot offset input credits against their output liability as Sales Tax has no such concept. So you are paying tax-on-tax-on-tax all the way to your raw materials that have been imported APART from paying tariffs. No wonder prices are so jacked up in US and to compensate that, you all have inflated salaries. The US Government is fleecing its citizens dry. Please study how VAT/GST works in EU/India/Australia and compare it with Sales Tax regime in US and you will know why Sales Tax is so bad. > Meanwhile how many times something is taxed isn't really the relevant thing. It's, how much in total are you paying in taxes? If you pay ~10% three times, that's not really any worse than paying ~33% once. It is, of course, worse than paying 10% once. You are not paying 10% three times. Assuming raw material was imported at $X + %10 of $X (tariff is 10%), value add was say $10, then the IRS is collecting say sales tax of 10% of the total value: 10 % of (($X + %10 of $X) + $10). Now this is just the simplest chain where raw material -> imported by manufacturer -> sold directly to consumer. But that is not how it is done. You typically buy from a retailer who buys from a dealer who buys from a wholesaler/manufacturer. So that would be 10% every time ON THE FULL VALUE (not just on value added). To demonstrate a simple raw material -> imported by manufacturer with value added -> sold to dealer/distributor -> sold to retailer -> sold to customer, this is what it would look like: 1. Imported by manufacturer: $X + %10 of $X 2. Value added ($10) and sold to dealer/distributor: 10 % of (($X + %10 of $X) + $10) 3. Dealer stocking/shipping charges added (say $10 again) and sold to retailer: 10% of (10 % of (($X + %10 of $X) + $10) + $10). 4. Retailer stocking/service charges added (say $10 again) and sold to consumer: 10% of (10% of (10 % of (($X + %10 of $X) + $10) + $10) + $10). The longer the chain, the more tax-on-tax you are paying (in some cases the total final tax can even go above the actual cost of making the product). This nonsense is solved by VAT/GST where the tax you pay for acquiring raw material or processed inputs comes back to you as input credits, which you can use to offset your output tax liability. There is no compounding of tax in VAT/GST. EDIT: added an example for more clarity