Posted on 06/30/2018 10:06:38 AM PDT by ProgressingAmerica
I like how the constant harping and carping about tariffs these days gets invoked together with fearmongering about Smoot Hawley and the Great Depression. What is missing? The Revenue Act of 1932. After the 1929 crash there was a small tax cut, but this was overshadowed by Smoot Hawley just months later. In the middle of bad economic times, you simply don't raise taxes, and yes, a tariff is a tax. But let's get to the meat of the numbers, shall we?
The Revenue Acts of 1918 and 1921 had a top tax rate of 73%.
The Revenue Act of 1924 reduced this to a top tax rate of 46%.
The Revenue Act of 1926 reduced this again to a top tax rate of 25%.
It was not raised from this number until The Revenue Act of 1932, which had a top tax rate of 63%. This was lower than the ninteen-teens tax rates of 73%, but considering the jump of 25% to 63%, this is over a 100% increase and it indeed was at the time the largest peacetime tax increase in American history.
But that is not what we received in 2017. For all its flaws, the 2017 Tax Cuts and Jobs Act does a reverse-Hoover by lowering taxes. I can explain; there is a certain formula here:
1929: poor economy, raising tariffs, largest tax increase in American history. (From what I can tell, they were not lowering burdensome regulations in 1929 either)
2017/2018: decent economy, raising tariffs, lowering taxes as well as lowering regulation.
See the stark differences here? Most of the time we hear that these tariffs should not exist and they will only lead to trade wars and other issues. But in reality it is the 16th amendment which should be repealed. The only thing they get correct when talking about this issue is that a mixture of income taxes and tariffs is a deadly combo. They should not be mixed. But it isn't the tariffs which should be eliminated, it is the income tax which should die a horrible and bloody death.
The Founding Fathers used tariffs as the only (or at least main) form of taxation, and that is probably the most proper way of taxation. The irony of tariffs is that they are in general taxes only on the rich - the problem is that it does not grant the kind of authoritarian domestic controls that income taxes bring, which is really what the progressives love and seek.
Even with taxes, the issue is not actually the issue. For progressives, control is the issue and control is always the real issue. Everything else is merely window dressing. It's always been about control and it has been this way going back to 1906 when income taxes were first proposed by the president in his SOTU that year. It's all about control.
Ping..............
Well written, and more importantly, it is succinct.
Something of a rarity these days.
PING for folks to read, copy and share
Alcohol taxes were huge. In 1900, they accounted for something like 30 to 40% of federal tax revenue.
Therefore, before you could have prohibition, first you had to have a replacement for the alcohol tax.
And that replacement was the income tax.
The prohibitionists were fully aware of this, and they were one of the main forces (maybe the main force) behind the income tax Constitutional amendment.
Most of the immediate foreign retaliation against Smoot Hawley fell on the American agricultural sector. This set off a chain reaction of failing banks all across the country. Some of the worst effects weren’t even intentional retaliation. With reduced sales of manufactured goods to America, the Europeans didn’t have dollars with witch to buy American farm produce. Money had to be real back then. You couldn’t just write some numbers in a ledger like they do now.
When you actually need the damn spell checker it doesn't work.
BTTT
Amen, and amen.
Five percent across-the-board import duties *should* fully fund the gov’t. That’s assuming that Congress can avoid doubling the budget again...
I totally agree with repealing the 16th Amendment. The U.S. government only gets about half of its revenues from the income tax and over half of what it is doing is unconstitutional. So, it’s basically a wash.
Please read my Federalist Letters to Corporate America from 2015 on my blog site: https://backyardfence.wordpress.com/federalist-letters-to-corporate-ameria/
It’s only 8 letters and can be read in about 20-30 minutes. They are a bit of a tough read, but I think worth the time.
I also recommend repealing the 17th Amendment and revoking the House rule limiting membership to 435. The logic, history, plan and strategy to accomplish these 3 things against the will of the Congress that has been benefiting from these corruptions of our Constitution is all included.
bkmk
And then the crash.
Coolidge cuts taxes and spending, and we have the Roaring Twenties. Hoover comes in and undoes that, and we get a depression — which Hoover’s successor made longer and deeper.
They used head taxes. If they didn’t have the revenue they required, they would tell each state, “Here’s your share. Raise it however you choose and send it to us.”
Warren Harding, too. His achievement in returning the US to normalcy has had a new appreciation in the past few years.
Some selective tariffs appear to be necessary
now
in order to get fairer trade in place...
and yes, some jobs for American workers
I agree that general tariffs on everything.. would be a bad idea, at least until such time as there are jobs for all Americans who want them (President DJT is on the right track, he has gotten a good number of jobs restored already....let’s let him work his deals awhile longer... he’s winning for us....so far...)
Harding resolved the Wilson economic downturn before Coolidge became President. I consider Harding to be one of our greatest Presidents for kicking off one of our greatest eras of prosperity. Unfortunately, a lot of it gets attributed to Coolidge single-handedly. It’s too bad Coolidge didn’t serve another term until 1933, we might’ve had a different outcome for the Depression (perhaps merely just the “Panic of 1929”).
That’s what I gathered about Harding from the recent books about him.
(From the book reviews.)
Leftist historians hate Harding because he proved beyond a shadow of a doubt that cutting taxes and cutting government works like a charm to bolster the economy. He also had gargantuan GOP majorities in 1921 to accomplish his goals.
The only net negative was that he had some corrupt people in his Cabinet, but that wasn’t due to personal corruption on his part. Of course, the corruption of Albert Fall was nothing compared to the subversive and treasonous corruption of Democrat regimes.
Yes, Harding great. Sold off gubment RRs, shipbuilding, brought in Mellon.
The 16th amendment is not going to be repealed. And I’m not interested in having more expensive consumer goods on top of other taxes.
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