*Article 1 - The Legislative Branch
Section 8 - Powers of Congress
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
Japan’s been in a 15-yr recession, and China’s economy is systemically rotten with malinvestment. I hardly think these are worthy examples to follow.
Free trade to the founding fathers meant the freedom of the individual to buy from and sell to any country. It did not mean slashing tariffs on imports while other countries maintain restrictions on imports. In fact, the federal government in the 19th century was funded primarily by tariffs.
For those who believe high tariffs are an impediment to economic growth, look at the US economy from 1865 to 1900. Consider the US economy in the 1980’s before the lowing of tariffs in the 1990’s.versus the US economy today. The dismantling of trade barriers under Clinton and Bush has not resulted in economic prosperity for the US. In fact it has resulted in the loss of the manufacturing sector and millions of middle class jobs. Bring back the tariffs and quotas of the 1980’s, lower taxes on profits derived from US manufacturing to zero, and reduce the government regulatory burden. You will see a booming economy as manufacturing returns to the USA.
The plan will harvest at least $8 to $10 billion per month (potentially more, much more) in revenue that is currently going off shore. It will restore a great deal of competive balance in the import/export arena.
Under our current system, all of the tax liability of the people and companies involved in producing and selling a product are embedded in the cost of the product. For example, when Ford pays the assembly line worker, the pay includes payroll taxes and income taxes paid by the worker. That expense all goes into the price of the car. When a foreign product comes in, it does not have US taxes embedded, however it competes in the marketplace against US products that do have the embedded costs. When the foreign product is sold, the difference heads straight out of the country. With the 9-9-9 plan, at least 9% of the embedded costs are removed and collected at the point of sale instead, resulting in an out the door price roughly equal to the previous price. The foreign product must now compete at the lower cost. The 9% sales tax is added on the end. The little bonus that the foriegn company was collecting is greatly reduced. Since our trade deficit alone is $80 billion per month, we know at least that much will be subjected to 9%. In truth a whole lot more. Sales tax on imported goods will be a tax bonanza without the US taxpayer paying one nickel more.
On the other hand, what does it do for US exports. The 9% sales tax is already removed from the cost of the goods. Also, export revenue is excluded from the 9% business tax. So exported items will have a total cost at least 18% lower than they currently do. Just imagine what that will do for the export of US manufactured goods and food. An export bonanza. The profits from this will go back into the economy and be hit with the 9% sales tax. Everybody makes out, more jobs, more exports increasing profits and 9% sales tax reaped on the expenditure of those profits. Win-win-win!