Replies

x to central_va: "It’s great that you’ve finally endorsed Abe Lincoln, but things have changed a lot in the last 160 years."

central_va #139: "Abe Lincoln went both ways, he incorporated a temporary income tax and increased tariffs."

Since our pro-Confederates claim it was high Republican tariffs, not slavery, which drove secession and civil war, it can be a bit jarring to see a pro-Confederate FRiend, central_va, arguing for higher tariffs.
Is it even possible that all those arguments we made -- about how Lincoln's Republicans wanted to Make America Great by Putting Americans First -- actually sank in?

Naw! No chance, I'd bet.

Regardless, the single biggest problem with low tariffs and "free trade" can be boiled down to one word: China.
Or, if you prefer -- CCP China, meaning, low tariffs and "free trade" don't work so well with freekin' enemies!!

It brings to mind the pithy quote often attributed to Lenin or Stalin:

"Capitalists will sell us the rope we'll use to hang them."

Even with our closest world friends and allies, "free trade" is not always fair trade -- for example, if we buy millions of their cars, but they don't buy any of ours -- what's up with that?

On the other hand, we have historical examples -- i.e., Smoot-Hawley from 1930, usually credited with deepening and lengthening the Great Depression -- for what happens when tariffs get too high.
Yes, I seem to remember a previous discussion with central_va on Smoot Hawley in which he gave an interesting answer.

And, this is not a simple matter, so let me throw some recent numbers at you, and invite you to consider them all, especially where imports from CCP China fit in:

~2.5% -- US GDP growth forecast for 2024
3.8% -- current US unemployment rate (it was 3.2% in 2019 only ever matched in 1953 and 1968)
62.7% -- current US labor participation rate
68.1% -- historical peak US labor participation in 1997.
91% -- peak labor participation of prime working age men, 1997
89% -- today's labor participation of prime working age men.
100% -- US steel production tons today compared to its WWII peak.
72% -- US steel production tons in 1945 % of global steel production.
65% -- US steel production tons today compared to its all-time peak in 1973.
5% -- US steel production tons today compared to total global steel production today
$28 trillion -- value of all international trade per year
25% -- US portion of global international trade
90% -- portion of international trade transported by ships
~$3 trillion -- US exports per year
~25% -- US exports and imports percentage of total US GDP
~$4 trillion -- US imports per year
~15% -- China's percent of total US imports, meaning:
~$100 billion/year = potential revenues from a 25% tariff on imports from China.
~20% -- total of US imports from potentially "unfriendly countries", like CCP China, meaning:
~80% of US imports come from our closest friends and allies in North America, Europe and Asia.
~1/3 of US imports are finished consumer goods
~2/3 of US imports are raw materials, semi-finished components and equipment used in manufacturing or construction.
~1/4 of US exports are finished consumer goods
~3/4 of US exports are raw materials (including energy, metals and bulk food items), component parts and capital equipment.
~1/3 of the US workforce is in manufacturing, construction, transportation, retail and utilities, "the economy of things"
~1/2 of the US workforce is in "the economy of services" like private health care, education, entertainment, hospitality and financial services (i.e., banks, insurance, investments)
~1/6 of the US workforce is in all levels of local to national government, including military, law enforcement social services and public education
~$2 trillion -- US income taxes collected per year
~$6.6 trillion -- total US Federal budget for 2024
~$2 trillion -- US projected Federal deficit in 2024
~$29 trillion -- US 2024 GDP forecast
~$34 trillion -- US current total national debt
~120% -- US national debt to GDP ratio
~80% = value of the US dollar today compared to 2020
~50% = value of the US dollar today compared to the year 2000.
~5% = value of the US dollar today compared to 1945

So, for starters, considering these numbers, if the US imposed its historical average tariff rate of 25%, that could, all else being equal, produce tariff revenues of $1 trillion, which would replace roughly half of current income tax revenues of $2 trillion per year.

However, however... all else would not be equal, beginning here: the vast majority of our imports and exports are not finished consumer goods, but rather raw materials, components and equipment used in US "Made in America" manufacturing of finished goods.
This means import tariffs will drive up not just the costs of foreign consumer goods we buy in stores (i.e., Walmart), but also of everything else "made in America" using imported raw materials.

Bottom line: import tariffs will increase prices of everything thus reducing American consumption, while tax cuts could potentially increase savings thus generating capital to support new investments in the long-term future.

So, historically speaking, a 25% average tariff is a traditional conservative Republican plan, which will make the Left's heads explode and will not come without risks -- such as resulted from high tariffs like Smoot Hawley in 1930 and even the "Abomination" of 1828.
Note the ~100 year interval, returning in 2026??

US average Tariff rates since 1820.
Again, note the ~100 year peaks circa 1830 and 1930:

Someone mentioned the late Herman Cain’s 9-9-9 idea but failed to mention that it was a transitional plan.

I don’t remember what final tax system Cain wanted us to transition to. Maybe he didn’t have one. Maybe the “transition” was to force us to one.

I’ve always been partial to the sales tax idea. I read somewhere back when there was discussion about it. The ideas that read about proposed a 17% rate. Let’s make it 20% for ease of arithmetic calculation. That 20% would be revenue neutral. (Note this was way before the COVID spending spree!) Yes, I know it is a VAT, however unlike the EURO crowd this vat would be embedded in the Constitution via amendment and the rate fixed. A much stronger constraint then relying on the whim of the next parliament. Have it collected and administered through the states. (Though I have mixed thinking\views about that!) However, no matter what is proposed, national sales tax or flat tax or a tiered system like we have it all goes back to the fact there is simply too much spending and no will to cut anywhere.

Note a “flat tax” unless the rate is locked in Constitutionally is a “tiered system” of one tier! If it’s not locked in in over time it will evolve into what we currently have. The original income tax rate was a two-tiered system of 1% & 6%. (But not locked into the Constitution!) Look how that evolved!

Please note social security about to enter another crisis. The proposed band-aid is cut benefits. The solution will eventually be never-ending cash infusions from the general revenue. You can’t even get people on this site to properly understand how social security is funded and that you have no asset ownership in what you put in. We can’t even solve that!

I have a hard time thinking that any tax proposal other than taking more and more is politically possible.

Yes, higher tariffs alone won’t be enough to eliminate the income tax. But it could help lower it. Other incentives could also be applied to lower the income tax even further. Places with zero income taxes exists, however these places often have quite high taxes on imports. I think you mentioned that too.

The most unjust and and bolshevic-inspired tax in America which should be abolished no matter what... is the inheritance tax. Even Sweden had abolished it!

This is interesting as well:

https://ballastplan.com/wp-content/uploads/2017/10/6-13-2022-picture-2.png

https://ballastplan.com/a-history-of-the-individual-income-tax-in-america/#:~:text=Between%20the%20mid-1920s%20to%20early%201930s%2C%20the%20rates,was%2023%25%20and%20the%20top%20rate%20was%2094%25.

Is it even possible that all those arguments we made -- about how Lincoln's Republicans wanted to Make America Great by Putting Americans First -- actually sank in?

Wanted to make New York, Boston, Chicago and DC great.

These were the beginnings of the corrupt Government/Industrial complex that we are fighting today.

My stated position on states rights and secession transcend time and any specific reason; If the citizens of State A want out, vote for it, then they get to leave “Vaya con dios”.

This puts you in a awkward positon, siding with the South and their anti tariff position. If you want to see a service/agicultural society that imports all durable goods, and are in favor of that, then look no further than the CSA.