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53 sats \ 1 reply \ @028559d218 1 Mar \ on: A Few Thoughts About Replacing the IRS with Excise Taxes and Tariffs econ
How on Earth do we replace 'the IRS' with tariffs?
The math absolutely doesn't add up and where did people possibly get these weird notions?
IIRC import duties (import 'tariffs') would need to be around... 300% to make the math work. At which point there would practically be no imports except for things that can't possibly be made in the US.
So with no imports, there are no 'taxes paid' because the trade volume is so much less there's no revenue.
And if things 'are' imported (because they're no available domestically) they are like... 4x the price of before. Who does this help?
Furthermore, replacing income taxes with 'consumption taxes' is wildly regressive. I mean I GUESS if the American people vote for it then OK... but it's essentially saying 'hey if you have a large income your income taxes go down A LOT'.
But if your income is small... your 'income tax' stays the same but your taxes for purchases (sales) go up probably a lot.
Are people really going to support that if they understand it? And if they 'don't' support that and they vote for it anyway... is that ethical?
The proposal is a 23% sales tax, with rebates per household to cover the additional cost of taxes on basic necessities. So, it's not "wildly regressive" and it does cover the current amount of revenue.
People don't like or understand the current tax system, so how would it be ethically different to replace that with another system they don't understand?
There's a whole literature on optimal tariff rates. For a large country, it's not right to assume that the world price stays the same after tariffs are levied. The reduction in quantity demanded from the importing country drives down the overall price, so the ultimate price paid is higher, but not by as much as the tariff rate.
Btw, I tried to zap your comment, but it doesn't appear to be going through. Is your wallet malfunctioning?
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