Because all the reporting I’m seeing is missing or burying the headline
Trump’s really been turning up the heat on promises of ever-more-massive tariffs in the last days of his campaign, going so far as to repeatedly claim he wants to do away completely with income tax in this country by paying for everything with tariffs insread.
Yet all the reporting I’m seeing is focused on one of two things:
- Can that work?
- Does he even understand how a tariff works?
But neither of those things matter. Because:
- Even if it can work, and
- Regardless
Either way, people in the US are going to be paying a whole lot more for imported goods. Because whomever it is initially paying the added costs of the tariffs to the US treasury, is going to pass those added costs along.
Now, even though it is–in effect–a gigantically huge new tax, I’m not going to call it that, because that opens the door for Trump to do a bit of a mind flip and preach that Americans won’t be paying these tariffs; countries that have been “ripping us off” will be. So let’s take it completely within Trump’s context.
And just ask, regardless of who’s first paying the tariffs, to whom are they passing the added costs along?
The answer: Americans. Middle class and poor Americans, by-and-large.
Because remember, if you’re very poor, you already don’t pay federal income tax, so not having a federal income tax doesn’t help you one bit. And now almost everything you buy that comes into the country cheap, will be more expensive. So while it isn’t a direct tax on you, per se, it is a huge new financial burden on you, borne by people who can least afford to pay. Same for the middle class. Yeah, you might get some income tax relief, but those trips to Walmart or Costco are going to be pricey. So the people who Trump is counting on the most to vote for him end up being the suckers and losers in this equation.
At the same time, who benefits the most from no income tax? Billionaires of course.
So let’s recap: tariffs go in. Doesn’t matter if they work. Doesn’t matter who actually pays the actual tariffs. The costs get passed on to you and me. Billionaires benefit. They get to keep a lot more money. You and me pay a lot more out of pocket.
Again, I’m not calling it a new tax, because that allows Trump to dance around it. But the fallout is exactly the same as if if was. Massive.
I’m even seeing some stories arguing that Trump can’t do it without an act of congress, so it’ll never happen. Not true. He can. On his own if he’s President. And that’s even without factoring in the new absolute powers the Supreme Court recently granted him, as long as he’s acting in an official capacity.
Yet another reason why Trump isn’t “better for the economy”.