Posted on 08/04/2015 4:22:30 AM PDT by expat_panama
Why would you want to tax consumers and hand the proceeds over to domestic producers in the form of higher prices and profits? That's what a tariff does, if it is effective at all.
“The demand is static?”
No; domestic quantity demanded will fall as a result of the higher prices resulting from the tariff.
“So increasing tariffs will not stimulate domestic production?”
Domestic production may increase as a result of the increase price and profits, and partially offset the reduction in the imported quantity of foreign-produced goods, but the overall domestic supply of the good subject to the tariff will fall.
It's actually even worse than this. The gains to the domestic producers are less than the losses borne by the consumers of the good that is subject to the tariff; this is what is called the “deadweight loss” of a tariff.
Your crazy. The USA survived well into the 1970’s with minimal importation of finished goods.
That is irrelevant to the subject of trade, it has no basis in the discussion, a canard, a red herring
I’d also venture to say that a Federal government funded by tariffs would have no shot at growing as oppressive as currently exists. The Wilsonians knew that.
still defending the IRS, progressive income taxes and the socialist welfare state I see. We got along fine with tariffs (and no income taxes) for quite a long period. But hey if you like a progressive income taxes then there not much I can say other then please do not call yourself a conservative because you are not.
Exactly correct. Big government requires big taxes and there is no tax as big as an income tax.
“still defending the IRS, progressive income taxes and the socialist welfare state I see.”
I said no such thing. I would much prefer a proportional (flat) income tax or a consumption tax, but I certainly don’t want either tariffs or the present welfare state.
We imported about $2.4 trillion in goods in 2014. A 25% tariff, even assuming perfectly price-inelastic demand for imports, would raise less than what we spend on defense alone.
“The USA survived well into the 1970’s with minimal importation of finished goods.”
Yes, on balance we imported raw materials and exported finished goods because our relatively low wages and relatively advanced technology made us a high “value added” country. In recent years, our wages have risen relative to those of many of our trading partners and our technological advantage has eroded. Tariffs will not reverse either of those trends.
And I am still waiting for you to defend your statement that Jefferson, for example, favored high tariffs.
Nowadays, an American-made car is more likely to be a Honda or Toyota than a Ford or GM.
Does that really tell us anything? The USA has a higher standard of living today than it did in the 1970s.
The problem is that government has not allowed business
to get into low gear, if it did business could soon
power out, instead by heaping regulation after regulation
on top of the small producers, government expects the
economy to lug along in third gear below the power band.
Guess they just don’t understand capitalism, or maybe
they just hate it??
when in doubt, keep your cash.
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