this post was submitted on 26 Oct 2024
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Economy
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Generally tarrifs over income taxes makes sense in some ways, I don't expect him to understand what he saying or implement changes the right way, and there are geopolitical challenges.
If you think of taxes as friction or a decinsentive...
We should move away from income taxes. Consider a progressive income tax system, where the first 15k is not taxed, and the next 15k is taxed at a rate of 10%. Start here. Why are we taxing income at these levels?
Sales tax on goods makes sense. As it covers externalities.
Sales tax on services doesn't make sense. Why are we taxing exchanges of labour? This impacts productivity.
Trade is good when it's taking advantage of geographic advantages in a healthy way: I will trade you maple syrup for lemons. But not when a developed country is just exporting their exploitation: I have health, labour, environmental rules and you don't let's trade... A tarrif to equalize here makes sense.
Lastly developed economies should tax corporations on revenue (not income), this makes sense once they get to a certain size or share of the market. At the point where they are no longer adding value and instead just using size to hold market position through uncompetitive practices.
No. Sales and use taxes are inherently regressive; they affect the poor far, far more than they affect the wealthy, and thus harm all of society.
Tariffs don't make any sense, because that cost simply gets passed on to the consumer. The company I work for uses a lot of aluminum; the raw material is imported from China, and is custom extruded to our spec here in the US. Aluminum from the US is prohibitively expensive. If tariffs double the price of the aluminum, then the company we buy it from is going to pass that price on to us, and we're going to turn around and pass it on to our consumers. There's simply no competing industry in the US, and building the industry to compete would take a decade or more. So it's not even creating an incentive to buy American, because you can't.
A sales tax as a general term on goods that have negative externalities. That produce pollution, have negative health impacts, use public infrastructure etc.. whole foods, homes at minimum should be exempt. I agree that the poor shouldn't bear the brunt of tax policy changes.
Yes tarrifs getting passed to the consumer is completely the point, to normalize for asymmetrical human rights across the globe. Fair trade, not free trade. Not isolationist either. An elegant way to implement would be based on a democracy index.
The aluminum example is a good one. The consumer in this case is the company importing aluminum. They can buy from an authoritarian country at a 2x tarrif (or whatever), or a democratic country with no tarrif.
But... more of a thought experiment, I think that would be the way from a humanist perspective. But the geopolitics are very challenging.