External Revenue Service Push Back
Regulation Magazine's "Unintended Consequencse" Podcast (CATO) 14 Oct 2024 -- It's Important
Regulation magazine is perhaps one of the nerdiest names for a magazine for Admin Law types like myself, but the likes of one Antonin Scalia, long before he became a federal judge under Ronald Reagan, cut his teeth writing for the publication over four decades ago. The magazine has a podcast called “Unintended Consequences,” which recently did a take-down of what Trump now calls the External Revenue Service, rhetoric that seems to mean to replace income tax with tariffs.
The 4th quarter 2024 episode is called “The Politics of Nostalgia”. It asserts that we want a return to the small town supported by industrial jobs like steel. The episode was produced before the 2024 election and notes that tariffs, realistically, could only replace a small fraction of the Federal Revenue generated by taxes on income—something like 24 % of what the Income Tax generates.
Moreover, the episode argues, tariffs might become a hidden tax on American consumers as importers hit with the tax raise prices on goods and pass those on at the point of sale in the United States. American citizens end up paying the tax there. The argument is that the benefit is largely a wash, if not harmfully much worse.
The question is, does Trump and his team know this ?
My own view is that Trump does indeed know this, but pretends like he doesn’t. He is doing foreign policy. He’s doing the Art of the Deal, signaling a muscularity to foreign leaders who can’t tell where he’s going with this, whether he’s bluffing, and who would therefore give in to something else Trump really wants, which may end up helping Americans far more than his critics give him credit for, but something historians much later on will have to grapple with as they write about his true legacy.
Voters I think need to be aware of the trade-offs and temper expectations about what is really going on in these tit-for-tat wars. Which is why I share the argument here, along with my insight that this is really about foreign policy maneuvering that Trump most likely will not share with voters due to sensitivities of the details and low attention spans.
The voters have hired him to give it a shot. But this will help temper their expectation. There are no free lunches. True improvement will be a bit of a slog.
The last 3 minutes of this are about Universal Basic Income proposals. A $1,000/mo UBI would cost 3/4s of the Federal Budget, 90% of Federal Revenue, leave poor people below the current level of poverty, and create Democrat social-science scholarship proven disincentives to work not only for individuals but for entire households, so there would be less labor demand, increasing wages for those who do but passing higher prices on to consumers.
Link below:
Luke, for Trp Podcast
Latest episode: interview with a Gay Republican
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