For some reason, this announcement by Trump did get fairly little media attention. Much less than what he said on the tax on tips! Maybe it was so silly that even conservative media did not report it much!
Unfortunately, Trump is not an economist and his knowledge of history is very patchy at best! And it shows!
When the tariffs were replaced by the federal income tax as a major government revenue source in 1913, the federal government also used to be very small. So unless Trump extraordinarily shrinks the federal government, tariffs will not generate enough revenues via tariffs. The US only imports about $4 trillion per year, even a 100% tariff on all imports (very unrealistic and it will consequently reduce imports) cannot finance over $6 trillion in annual federal government expenditures.
Maybe, Trump would be more successful with a more realistic, very simplified low flat tax. The "federal internal revenue code (2,412,000 words long) and federal tax regulations (7,655,000 words long)." Source. Maybe the flat tax code and regulations of the federal income tax can fit on one page!
"President Trump said the U.S. could possibly eliminate the federal income tax if his tariff plans work out as intended.
"If the tariffs work out like I think, a thing like that could happen, if you want to know the truth," he said. "Years ago, 1870 to 1913, we didn't have an income tax. What we had is tariffs." ..."
"President Donald Trump during a visit to Las Vegas touted the tariff system, saying it “made so much money.”
“Years ago, 1870 to 1913, we didn’t have an income tax. What we had is tariffs, where foreign countries came in and they stole our jobs, they stole our companies, they stole our products, they ripped us off. Then we went to a tariff system. The tariffs system made so much money. It was when we were the richest from 1870 to 1913,” Trump said.
“Then we brilliantly came in with the income tax. We don't want others to pay. Let's have our people pay. Then you had the depression in 1928, 1929. I call it 1929. That was a bad time. But you didn’t have tariffs. You had tariffs that ended in 1913. It was the richest our country ever was,” he added."
No comments:
Post a Comment