Trump’s proposed tax policies; Are they viable?

I did a little searching to see if the quote from Bessant in the link I posted before is real.

Maybe it is. No more income tax.

https://www.livemint.com/news/us-news/scott-bessent-becomes-new-secretary-of-the-treasury-us-president-donald-trump-america-11738028081299.html

Scott Bessent has been confirmed as US Treasury Secretary, advocating for universal tariffs starting at 2.5%. He aims to eliminate [income] taxes, implement a consumption tax, and adopt a gold-backed currency, marking a new economic era under President Trump.

Bob

The concept of tariffs goes back a long way

The concept of tariffs goes back to the formation of the United States and has traditionally been considered a viable source of tax revenue for the Federal government. Federal and state income tax policy goes back to 1913, and thus, the federal government survived for a long time without depending on income taxes for revenue.

I’m not placing a normative judgment on the concept of tariffs, but if done right, tariffs can be a viable alternative to the current tax revenue generation scheme.

Tariffs have merit

In terms of fortifying national security and sovereignty, the implementation of a tariff scheme can be a wise one. If a country wished to enhance and build up its manufacturing and export capabilities, I can’t think of a better tax regime than through tariffs.

I think about what the Biden regime did as well as the previous ones. They usually had no tariffs on important economic sectors, but often directly subsidized the companies they deemed important. Tariffs would eliminate the need to provide subsidies. Moreover, a long-term regime of tariffs would theoretically help domestic companies from getting into their precarious financial positions in the first place.

Most recently I look at how many billions the federal government has already given to Intel, for instance. By the time the Biden regime sent many billions over to Intel, the damage from foreign competition was already done.

I also think of the many billions that were given to the automakers during the 2008 financial crisis as well. There are dozens of other instances over the years. The federal government could just raise a tariff, collect the tax revenue, and let the company compete on the new playing field.

It’s clear to me that the current way of raising tax revenue through income taxes is deeply flawed and definitely favors those who know the system. Wealthy investors definitely benefit at the expense of the average wage earner. Moreover, the opportunities for evasion and avoidance rises greatly through income tax generation.

What about Adam Smith’s microeconomic policies?

I have often said that the promotion of Adam Smith was done by those who promote global governance. I’m not saying Adam Smith is wrong per se, but Adam Smith favored open trade and open borders over National security and self sovereignty.

We need to understand that global macroeconomic as well as microeconomic policies built upon the work of Adam Smith inevitably lead to a global economy. National policy makers have to ask themselves if that’s their ultimate goal. Do they prefer a global economy over a relatively closed one that favors domestic matters over those that build up the productive capacity of other nations? I leave that up to the reader to contemplate.

If done correctly, tariffs actually could be a legitimate way to build National security while raising tax revenue.

A blank slate

The concept of tariff policies theorized by Republican Party politicians has been an ongoing idea since the first Reagan regime and a number of Republican presidential nominees over the decades have proffered the elimination of the income tax with emphasis on tariffs and VATs.

If the United States started with a blank slate regarding taxes, I certainly would not promote revenue generation through income taxes. As we know, income taxes are not only sloppy but they encourage black market sources of income and are much more difficult to enforce. The income tax system is essentially an honor system on a lot of levels.

Why the sudden push for tax overhaul?

In order for the United States to construct a North American or Western hemispheric Union, it’s necessary for its government to overhaul its unique tax policies.

Why do I think we have a greater chance this time to eliminate income taxes as a primary source of revenue generation for the Federal government? If we observe the formation of a North American or Western hemispheric union, Trump’s proposed tax policies would go a long way in harmonizing the current tax policies of the various nations within North America and the Western hemisphere.

Keep in mind that the US dollar will be the front runner as the currency for any newly formed North American or Western hemispheric union. However, if the United States implemented a series of tariffs that effectively placed other exporting nations, such as China and the Southeast Asian countries, at a relative disadvantage, exclusionary tariffs would help to speed up the demise of the US dollar as the global reserve and transaction currency. Nothing works in isolation and we need to comprehend the ramifications of any policy change.

Whether or not Donald Trump can help rewrite much of the federal governments tax policy remains to be seen. If the United States can incorporate Canada, Mexico, and other Western hemispheric Nations, I see a much greater chance of tax policy overhaul. However, if the Trump regime begins to face fierce resistance or stumbles, I see much of it dying on the vine. Stay tuned.