Can Trump seize this once-in-a-lifetime opportunity to fix the tax code?

[Jazzhead]

The laws of economics are just as immutable as those of physics!

Perhaps, and you don't need to convince me of the benefits of free trade - heck, our nation was founded on the principle of free trade among the several states.   

But it is up to the governments of nations to establish the playing field and rules by which free trade will operate.   And the composition of the playing field matters - a lot.  Free trade within the U.S. is one thing, or free trade with the European union.  Such free trade on a level playing field doesn't intrinsically displace American workers and drive down wages.   But if you favor free trade with the likes of China,  then you favor American consumers at the expense of American workers.   And enough of those workers have seen their life prospects dissolve that they elected Donald Trump as President.   

[DB]

No, tariffs are one means for raising tax revenue to cover the cost of government.  They are no better or worse than any other form of taxation, in that each has "winners" and "losers".   I'd say tariffs have their role to play within a system of taxation,  and, like any other kind of tax (income tax, sales tax, VAT, user fees, etc.)  can be designed efficiently or designed poorly.

I think there's a rather knee-jerk reaction against the idea of tariffs, even though the Founders themselves favored their use.   I support the use of APOLITICAL tariffs as part of an integrated system of taxation.   And I'm happy to support free trade, within a fair system of rules that doesn't punish American workers.  Free trade with countries whose wage rates and labor/environmental protections don't match our own is intrinsically biased in favor of consumers and against workers.  if you're going to support unbridled free trade, then at least be honest about who you're favoring and who you're consigning to a lifetime of misery.   

You do realize that we export a massive amount of stuff around the world. That every barrier put up to our products, simply because they will do what we do to retaliate, means we sell less of those products and that costs jobs and wealth here, right.

And, actually most of those taxes are deadly long term and we're paying the price for many of them now. The more you feed government the more government you get. We are not withering due to a lack of government. Just the opposite, we are being crushed by its burden. Government is now in practically every facet of our lives. Our children need a license to setup a lemonade stand in front of their house these days... And we accept that without much more than a whimper... And we sing songs of "the land of the free and home of the brave"... What a sick joke. Now we need our safe spaces, both in college and in competition it seems...

[DB]

But trade policy toward the outside world has always been a legitimate function of government - that is, unless you are against the notion of borders between nations.

And that policy has been to open trade. To reduce barriers. To live by example.

The answer is to make us more competitive in the world be reducing the burdens on our economic engine, people - business, by not taxing and regulating the hell out of them. You've got things backwards. First laws are passed that make us less competitive and then you demand that we put up barriers to our competitors to fix the consequences of those laws. It is a vicious circle swirling around and around ever sinking further chasing the bleeding and not the cause. It always ends badly. Freedom is the only choice that works long term.

[Bigun]

Perhaps, and you don't need to convince me of the benefits of free trade - heck, our nation was founded on the principle of free trade among the several states.   

But it is up to the governments of nations to establish the playing field and rules by which free trade will operate.   And the composition of the playing field matters - a lot.  Free trade within the U.S. is one thing, or free trade with the European union.  Such free trade on a level playing field doesn't intrinsically displace American workers and drive down wages.   But if you favor free trade with the likes of China,  then you favor American consumers at the expense of American workers.   And enough of those workers have seen their life prospects dissolve that they elected Donald Trump as President.

IF we get our own house in order we have nothing at all to fear from free markets! It won't make any difference what they do because NONE of them will be able to keep up with us and we will very likely be importing labor to fill the jobs we simply can't fill from within.

[Jazzhead]

You do realize that we export a massive amount of stuff around the world. That every barrier put up to our products, simply because they will do what we do to retaliate, means we sell less of those products and that costs jobs and wealth here, right.

Of course.  I'm in favor of free trade, on a more-or-less level playing field.  And retaliation is the natural reaction to politically-based tariffs.   What I favor is a system of apolitical tariffs based on objective measurement of the value added by non-U.S. labor, without regard to whether a nation is or is not our ally.   The idea is to minimize the threat of retaliation and retain the viability of our exports.   

And, actually most of those taxes are deadly long term and we're paying the price for many of them now. The more you feed government the more government you get. We are not withering due to a lack of government. Just the opposite, we are being crushed by its burden. Government is now in practically every facet of our lives. Our children need a license to setup a lemonade stand in front of their house these days... And we accept that without much more than a whimper... And we sing songs of "the land of the free and home of the brave"... What a sick joke. Now we need our safe spaces, both in college and in competition it seems...

Reduce the size and scope of government?  Sign me up - we're on the same page.   But again - it is a perfectly legitimate function of the federal government - or any national government - to determine the rules of engagement for trade among nations.  Otherwise, let's subscribe to the globalists' wet dream of eliminating all borders and national sovereignty.   

[Jazzhead]

IF we get our own house in order we have nothing at all to fear from free markets! It won't make any difference what they do because NONE of them will be able to keep up with us and we will very likely be importing labor to fill the jobs we simply can't fill from within.

The question isn't the efficacy of free markets, it's the question of the proper size of those markets.   We are under no obligation to trade freely with the entire world.  Borders exist for a reason.  We treasure our national sovereignty for a reason.   We are under no obligation to promote globalism for its own sake; we should do so only if it is consistent with our national interest.   

[Bigun]

The question isn't the efficacy of free markets, it's the question of the proper size of those markets.   We are under no obligation to trade freely with the entire world.  Borders exist for a reason.  We treasure our national sovereignty for a reason.   We are under no obligation to promote globalism for its own sake; we should do so only if it is consistent with our national interest.   

I have not said a word about promoting globalism!  NOT ONE!

What I did say is that IF we got our own house in order we would not need to fear free trade with anyone anywhere.  And there would be NO need what so ever for devices like tariffs!

[Smokin Joe]

Of course,  that presupposes that American workers should be expected to compete with foreign workers willing to work for pennies on the dollar,  as compared with the kind of wages American workers need to provide decent lives for their families.   

The anger that has led to Trump's election is based on the reality that globalism has changed the game for many Americans, shattering lives and leading to the sinking feeling that our kids won't have it as good as we do.   

Free trade?  I'm all for it - but within a fair playing field and fair rules.   Should we trade freely with those nations that have similar wage rates and labor and environmental protections to our own,  or trade freely with those nations that abuse their workers and pay them peanuts?   For generations now, both political parties have catered to American consumers by encouraging cheap foreign goods, while ignoring the plight of American workers priced out of the middle class they thought would be their patrimony.   

I agree with your point, but one leg has been removed from our economic horse before the starting bell. The cost of compliance with moving target environmental regulations is a business killer. It is the weapon wielded in the "War on Coal" causing serious damage to that industry by shutting down the power plants that used the product. As soon as one concern is addressed, another is imposed by new, revamped, or more stringent regulation. Not only does the equipment to comply and the modification of existing equipment add to the cost of products, but the shut down time to perform modifications removes revenue as well. If that same task can be performed in areas which have no such regulation issues, it can be done more cheaply and efficiently, all other things being equal, which they commonly are not. To a great extent, our government has imposed the very things which have already caused the out-migration of American jobs.
There is little point in building a manufacturing facility which will be in compliance this year and a Superfund site in ten (due to changing regulations), when the same product can be made elsewhere and transported here for significantly less than it would cost to make it here.

[Smokin Joe]

Well said, what I was trying to say but doing it poorly... And the next question is where does it end? Every domestic producer will lobby to tax his competitor over the border and the government then picks winners and losers while the consumer simply loses. In the 70's we had really crappy cars because the auto workers unions and the care companies had little competition outside their bubble.

True, but an entry level new car in the '70s was 2K or less, and you could work on it with a few fairly inexpensive tools.

[Smokin Joe]

You can't bend economic forces without them catching up to you. We are not an island. We can lead or fall behind. The world will go on with or without us. We compete by innovation, by working smarter, by producing more for less. Extortion often works for awhile but the consequences always catch up to you. Just see what happens with entrenched unions over time.

As the Chinese gain wealth, fewer and fewer of them are willing to work for "pennies on the dollar" and more and more are demand better working conditions including environmental. They don't want to be poisoned anymore than other people. Japan was much the same in the 60's moving into the 70's. Those days are long gone now and that day is coming for China too.

True, but there is always another 'China' over the hill, bee it Vietnam, India, Pakistan, wherever, where people will do more for less.

You also put way to much faith in government deciding what is "fair". What is fair in Washington is determined by who has the best lobbyist and who feeds the beast best.

Also true. If government uses the word "fair" anywhere in the document, you can just about bet it isn't.

[Bigun]

I agree with your point, but one leg has been removed from our economic horse before the starting bell. The cost of compliance with moving target environmental regulations is a business killer. It is the weapon wielded in the "War on Coal" causing serious damage to that industry by shutting down the power plants that used the product. As soon as one concern is addressed, another is imposed by new, revamped, or more stringent regulation. Not only does the equipment to comply and the modification of existing equipment add to the cost of products, but the shut down time to perform modifications removes revenue as well. If that same task can be performed in areas which have no such regulation issues, it can be done more cheaply and efficiently, all other things being equal, which they commonly are not. To a great extent, our government has imposed the very things which have already caused the out-migration of American jobs.
There is little point in building a manufacturing facility which will be in compliance this year and a Superfund site in ten (due to changing regulations), when the same product can be made elsewhere and transported here for significantly less than it would cost to make it here.

Thank God!  There IS someone else who actually understands what is really going on! 

Big business and BIG government have long been partners in crime!

[IsailedawayfromFR]

Tariffs are purely a wealth-transfer method where the government picks winners.

Wealth-based taxes (and to a lesser extent, income-based) place the burden where the benefits are received.  The wealthy have more to lose if we're invaded, for example. 

I'd venture to say that our income tax system also picks winners and losers.  Right now, if you are rich, you can abscomb with not only the federal tax-support for a Tesla car, but also the tax credit on your own 1140.  Does that actually seem like picking a winner and loser?

Of course, reducing tax/tariff burdens in general should be our primary goal, but a tariff is like piling sandbags higher and higher and claiming the sea is receding.  It's all an illusion.  Sure, we protect a job short-term, but the standard of living of everyday Americans goes down...and we can't force foreigners to pay us extra just because we're American.  The burden goes right onto Americans' shoulders.

you are only portraying one side of this equation.  What about the increased competitiveness for the American product, the US-based sales taxes paid on it, the payroll increase, the tariff revenue which comes about?  If tariffs are properly utilized, not just some indiscriminate whim, but targeted for specific purposes and time, they are as good a tax as say an income tax.

[Suppressed]

I'd venture to say that our income tax system also picks winners and losers.

Agreed.  Saying tariffs would be a bad idea doesn't mean our current system is right!

But no matter how upset you are at your face, it's stupid to lop off your nose.

you are only portraying one side of this equation.  What about the increased competitiveness for the American product, the US-based sales taxes paid on it, the payroll increase, the tariff revenue which comes about?  If tariffs are properly utilized, not just some indiscriminate whim, but targeted for specific purposes and time, they are as good a tax as say an income tax.

Increased competitiveness?  Huh?

American products get LESS competitive when there are tariffs.  Sure, prices can be artificially raised to soak American consumers, but that doesn't mean you can force someone in Germany, France, Japan, China, Canada, etc., to buy.  In fact, it cuts the incentive to make a competitive product.

I think we need a marquee reminder....

TANSTAAFL! 

Sure you can target a tariff for a short period of time, but you have to pay for it somehow.

[IsailedawayfromFR]

American products get LESS competitive when there are tariffs.

a tariff on another country's product makes our less competitive?

That is so weird a comment I cannot even respond.

[Idaho_Cowboy]

True, but an entry level new car in the '70s was 2K or less, and you could work on it with a few fairly inexpensive tools.

If it weren't for the all the federal regulation you could get pretty close to that today. But when the government is involved in car design right down to thinking they have the right in demand ever car have a back up camera, you can kiss cheap new cars goodbye.

[Smokin Joe]

I'd venture to say that our income tax system also picks winners and losers.  Right now, if you are rich, you can abscomb with not only the federal tax-support for a Tesla car, but also the tax credit on your own 1140.  Does that actually seem like picking a winner and loser? you are only portraying one side of this equation.  What about the increased competitiveness for the American product, the US-based sales taxes paid on it, the payroll increase, the tariff revenue which comes about?  If tariffs are properly utilized, not just some indiscriminate whim, but targeted for specific purposes and time, they are as good a tax as say an income tax.

It is the fact that tariffs are target for specific purposes and times which makes them dangerous. Suppose, in his quest to have gasoline as expensive here as in Europe, Obama had been able to impose a tariff on every barrel of imported crude? (That's about half the daily supply, in the US). While the domestic oil industry would have benefited from the price support (the effective price of domestic crude would have gone up), the consumer would have paid more at the pump despite there being more oil than ever on the world markets.

Now, turn that over, and when the tariff came off, the collapse in the energy sector would have been devastating, with prices not covering extraction costs and the industry imploding.

That is the ability to impose a boom/bust economy, and in so doing, pick entire sectors which will benefit or collapse as a result. The potential for equity market manipulation is staggering.
The ability to impoverish or enrich investors, depending on who is invested in what, unfathomable.

We gripe about picking winners and losers during the Obama administration (they did it with regulations and other policy changes), and that remains intact. Now, impose another layer of government picking winners and losers with tariffs, and everyone loses. Create that sort of fundamental uncertainty in the marketplace, where your living could be gone tomorrow, and the whole economy will hunker down in caution, while consumers will pay more at the point of sale.

[Bigun]

NO government should have a tool such as our current income tax system and most especially not OUR government!

[Smokin Joe]

NO government should have a tool such as our current income tax system and most especially not OUR government!

Between that, wide open credit, and the ability to seize what it wants and you get to sue later, we are in trouble.

[IsailedawayfromFR]

It is the fact that tariffs are target for specific purposes and times which makes them dangerous. Suppose, in his quest to have gasoline as expensive here as in Europe, Obama had been able to impose a tariff on every barrel of imported crude? (That's about half the daily supply, in the US). While the domestic oil industry would have benefited from the price support (the effective price of domestic crude would have gone up), the consumer would have paid more at the pump despite there being more oil than ever on the world markets.

Now, turn that over, and when the tariff came off, the collapse in the energy sector would have been devastating, with prices not covering extraction costs and the industry imploding.

That is the ability to impose a boom/bust economy, and in so doing, pick entire sectors which will benefit or collapse as a result. The potential for equity market manipulation is staggering.
The ability to impoverish or enrich investors, depending on who is invested in what, unfathomable.

We gripe about picking winners and losers during the Obama administration (they did it with regulations and other policy changes), and that remains intact. Now, impose another layer of government picking winners and losers with tariffs, and everyone loses. Create that sort of fundamental uncertainty in the marketplace, where your living could be gone tomorrow, and the whole economy will hunker down in caution, while consumers will pay more at the point of sale.

dangerous if used unwisely.

The millions of returning GIs demanded some jobs be there, and in the 1922 tariff, the purposes were clearly stated when implemented.  Not dangerous unless those purposes were not followed subsequently.

That tariff worked well as we enjoyed a period of prosperity in the 20s.

Overall, taxes are abhorrent; however, government cannot run without them.

There are several ways to produce that income for government.  Is tariffs the best? For specific purposes, they could be for a portion of that take.

What I object to is people making blanket accusations that they are all bad.  Just not so.

[Bigun]

dangerous if used unwisely.

The millions of returning GIs demanded some jobs be there, and in the 1922 tariff, the purposes were clearly stated when implemented.  Not dangerous unless those purposes were not followed subsequently.

That tariff worked well as we enjoyed a period of prosperity in the 20s.

Overall, taxes are abhorrent; however, government cannot run without them.

There are several ways to produce that income for government.  Is tariffs the best? For specific purposes, they could be for a portion of that take.

What I object to is people making blanket accusations that they are all bad.  Just not so.

Whatever their intent tarriffs always end up as a hidden tax on consumers.  I do not believe it wise to allow government that ability.

[Smokin Joe]

Whatever their intent tarriffs always end up as a hidden tax on consumers.  I do not believe it wise to allow government that ability.

@IsailedawayfromFR Tariffs are a legitimate means of raising revenue, and are Constitutionally authorized. There was a time the government was funded using tariffs and no income tax (an income tax took a Constitutional Amendment, and the meaning of "income" has changed, too).

A tariff tax system can be done, but the country was young then, and needed a lot less money because it was still within its Constitutional constraints. That isn't what will happen, though, instead both would be used. Envision being taxed on the money you get in exchange for your skills or labor. Now, pay the extra tax on any imported goods, reflected in the increased price. Now pay the sales taxes on that increased price. Pay the taxes on taxes with your taxed money.One for you, nineteen for me...'cause I'm the Taxman....(Beatles)

Now, however the Federal Government has metastasized into an ever growing, more intrusive, and often malignant entity which will not confine itself to its authorized powers, nor does very well at performing its assigned tasks, but instead pervasively regulates every facet of daily life, directly or indirectly, at great expense. Feeding that leviathan is only asking for more. It has the power to consume what it will, and to do so in advance, borrowing against the future of every citizen. If there is to be a restructuring of taxes, it must be met by restructuring the very creature they feed. Otherwise, it will only have found yet another vein to tap in its parasitic ventures.

[InHeavenThereIsNoBeer]

Milton Friedman wrote a book called, "Free to Choose" which I recommend to anyone who is interested in trade/tariffs.  In it, he makes a policy proposal that is absolutely stunning.  It pretty much flies in the face of every discussion on tariffs I've ever read, from either side of the issue.  And he backs it up well.  Even if you don't agree with his staunchly free trade stance, I think you'll appreciate the experience of reviewing his arguments if you like to think about this stuff.

You know, I just realized I haven't been called a Free Traitor once since I came here.  It's almost like we can look at the issues, discuss our views, come to different conclusions, and yet still not be forced to resort to calling each other names.

[Smokin Joe]

Milton Friedman wrote a book called, "Free to Choose" which I recommend to anyone who is interested in trade/tariffs.  In it, he makes a policy proposal that is absolutely stunning.  It pretty much flies in the face of every discussion on tariffs I've ever read, from either side of the issue.  And he backs it up well.  Even if you don't agree with his staunchly free trade stance, I think you'll appreciate the experience of reviewing his arguments if you like to think about this stuff.

You know, I just realized I haven't been called a Free Traitor once since I came here.  It's almost like we can look at the issues, discuss our views, come to different conclusions, and yet still not be forced to resort to calling each other names.

Funny how that works, isn't it?  It's nice to sit at the adult table and not be called a "poopy head" every time you turn around.

[IsailedawayfromFR]

@IsailedawayfromFR Tariffs are a legitimate means of raising revenue, and are Constitutionally authorized. There was a time the government was funded using tariffs and no income tax (an income tax took a Constitutional Amendment, and the meaning of "income" has changed, too).

A tariff tax system can be done, but the country was young then, and needed a lot less money because it was still within its Constitutional constraints. That isn't what will happen, though, instead both would be used. Envision being taxed on the money you get in exchange for your skills or labor. Now, pay the extra tax on any imported goods, reflected in the increased price. Now pay the sales taxes on that increased price. Pay the taxes on taxes with your taxed money.One for you, nineteen for me...'cause I'm the Taxman....(Beatles)

Now, however the Federal Government has metastasized into an ever growing, more intrusive, and often malignant entity which will not confine itself to its authorized powers, nor does very well at performing its assigned tasks, but instead pervasively regulates every facet of daily life, directly or indirectly, at great expense. Feeding that leviathan is only asking for more. It has the power to consume what it will, and to do so in advance, borrowing against the future of every citizen. If there is to be a restructuring of taxes, it must be met by restructuring the very creature they feed. Otherwise, it will only have found yet another vein to tap in its parasitic ventures.

yes, in spite of my reservations about Trump, he is in the best position to redo what this govt is doing.  I trust God helps him. Trump needs it badly

[Jazzhead]

Whatever their intent tarriffs always end up as a hidden tax on consumers.  I do not believe it wise to allow government that ability.

What?  I thought you were all about consumption taxes as the antidote to the dreaded income tax.

I think it's probably fairer, especially when revenues for general expenditures are required, to tax income rather than consumption.