Record US Trade Deficits Spell Impending Economic Defeat

AmericanEconomicAlert.org ^ | Thursday, February 17, 2005 | William R. Hawkins

[phil_will1]

"I agree that we could not survive with just tariff revenues in this period as we did in the past. But they should not be ignored as a revenue source. In my view they are preferable to income taxes. If I had my way, we'd have a national sales tax supplemented with tariff revenue. I'm for indirect taxes. They're more honest and we were a freer people when we had them."

Well, you are on the right track with an NRST. However, if we switched to an NRST, we wouldn't need tariffs. In fact, an NRST would work like a tariff in increasing the (artificially low)prices of imports. However, it wouldn't have the nasty side effects, since we would be taxing imports the same way that we tax domestic production.

Looked at another way, converting to an NRST would NOT be introducing a bias in favor of our producers into our tax system. It would be eliminating a bias in favor of foreign competitors from our tax system.

[phil_will1]

"No wonder we have a huge trade surplus!!"

I meant a trade deficit, of course.

[curiosity]

"If the freemarketeers ideal were to be fully implemented in America - the United States would die."

Very well said.

[1rudeboy]

No doubt. At the rate we are "dying," we will die, well, never.

[1rudeboy]

But of course that would highlight the truth that per capita incomes and especially after-tax purchasing power have been declining in America for decades now . . . .

Hmmm.

[cotton1706]

I agree completlely. My point was to get some benefit from this "trade deficit" but I like your idea even better. Simpler and much more even. As for the WTO, we should withdraw from that treaty. No foreign body should tell a free people what they can and cannot tax or subsidize.

This has been an interesting debate.