Hi Lurker. The federal budget was 2 percent of GDP back in the day when the tariff was the main source of revenue. The federal budget is now 20 percent of GDP.
A tariff deigned to raise 20 percent of GDP wouldn’t raise any revenue. Such a high tariff rate would cut off imports and then there would be no imports on which to apply the tariff.
This correlation of tax rates and tax revenues is sometimes called the Laffer Curve. But, it goes wa-ay back. I could cites Ibn Khaldun. I notice wikipedia see the connection:
https://en.wikipedia.org/wiki/Laffer_curve
Khaldun says when great nations are in the ascendancy, they use low tax rates to generate large revenues; but, then they are descending, they use increasingly higher tax rates to generate smaller tax revenues.
The whole idea of Trump is to reverse the course of the U.S., to put us back on the road of greatness. But, there’s no magic wand to undo the Laffer curve.
Besides, if we cut off imports, we cut off exports. The Smoot-Hawley Tariff of Herbert Hoover did not prevent the Great Depression. For the temporary benefit it provided to domestic manufacturers, it devastated our farm economu. The Smoot-Hawley Tariff in conjunction with the negligence of the Federal Reserve turned what might have been mere recession into the Great Depression. In particular, the Smoot-Hawley Tariff devastated the ag regions of the country, contributing to the Dust Bowl, and lead to hundred of failures of rural banks.
Republican Senators and Congressmen are mostly from the rural parts of the country. I don’t think they will go along with another Smoot-Hawley Tariff.
The founders taxed tariffs because the country and people were so poor there was nothing else to tax
“ The federal budget is now 20 percent of GDP.”
Therein lies the problem. Cut off the revenue to the Federal leviathan and cast it back into the Constitutional prison designed for it.
L
Payroll taxes would continue to cover SS and MC. The tariff income would only have to cover discretionary spending. So redo your math....
Others have sought to exonerate Smoot and Hawley, arguing that they were not responsible for the economic disasters of the early 1930s. “That the legend of Smoot Hawley endures and continues to influence the trade policy debate is a tribute to the public relations skills of partisans and ideologues with an agenda,” writes Al fred Eckes (1995, 139), a former chairman of the U.S. International Trade Commission. Those partisans and ideologues “successfully transformed a molehill into a mountain.” Conservative commentator Pat Buchanan (1998, 247, 250) contends that “not one of the charges against Smoot-Hawley stands up” and the higher tariff “had an imperceptible effect even on trade, let alone on a national economy of which foreign trade was but a tiny fraction.”