It’s been reported Donald Trump recently floated the idea of replacing the federal income tax with an increase of tariffs on imported goods. I guess he’s hoping voters tired of paying taxes would jump at the idea. Not necessarily following through any further, even the possibility of the concept exemplifies Trump’s impaired thought process.
The problem lies in the implementation. In Trump’s scheming, highly amplified tariffs would be instituted to pay for the cost of the U.S. government now covered by the federal income tax. It’s been estimated an average tariff rate of nearly 85% on all current imports would be required to replace the revenue produced by the income tax; thus, causing tariff trade retaliations leading to widespread economic disruption and revenue instability.
Not only would foreign countries strike back, but who’s to say foreign businesses would even be willing to pay such high tariffs to America? What if they just quit selling to the U.S. and concentrated their business dealing with the rest of the world and zero tariffs? Would they be that much worse off financially? The instability of imports could make tariff revenue unreliable compared to the comparatively more stable current income tax system.
Retaliatory tariffs of 85% could result in disaster for American businesses unsuccessfully trying to sell their goods overseas; resulting in such companies shutting down. Unemployment would mushroom starting with firing over 92,000 IRS employees.
But, wouldn’t the result be American businesses benefitting by consumers instead purchasing goods produced in America? Not necessarily. Instead, demand would likely immediately exceed supply with prices and inflation increasing accordingly for who knows how long.
These are just a few of the problems involved in Trump’s fanciful plotting. Could never really happen in America you say? Possibly, with an aristocrat in charge.
Raymond A. Hult, Bountiful
