H.R.25 – Repeal income tax and abolish the Internal Revenue Service
congress.gov
congress.gov
Edit - source: https://taxfoundation.org/taxedu/glossary/regressive-tax/
Viewed through this lens, the whole program is remarkably internally consistent. Tariffs on imports, cuts to corporate taxes, capital gains taxes and estate taxes, indiscriminate across-the-board reductions of 50% or more to regulatory agencies, etc.
At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.
Also the regulatory cuts are sorely needed at this point. It took longer to get regulatory approval for the Starship rocket than it did to actually build the rocket (the biggest and most complicated rocket ever built).
We could frame this another way - if every state in the US enacted tariffs on every other state, would we all be collectively richer or poorer?
Maybe some states could set up their own cottage automotive industry, but overall there is going to be more deadweight loss to the economy than revenue made by the tariffs.
Those statements are generally not true across countries, but generally are true across states within a country. Things like working standards across countries mean that another country can employ slaves and have uncompetitive costs due to free labor, causing an unfair environment for those same companies forming in countries without slave labor. That is much less likely within the same country.
So it’s not necessarily the same to frame tariffs across states to be similar to tariffs on other countries. There are meaningful differences that make it harder to ensure similar standards across countries, which can make tariffs be meaningful. It helps to account for externalities inherent to lacking the protections mentioned in the first paragraph.
No, they're not "just" that. Those costs get passed onto the consumer in the form of higher prices. Corporations aren't going to eat the cost out of the goodness of their hearts.
> At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.
If a widget from China costs $100 because of tariffs, then American companies who make the same widget have no reason to undercut that since they know consumers have no other options -- effectively raising the price floor.
There are also issues with the "union workers get the money" because we're effectively stiffing the rest of the U.S. population in order to prop up a specific segment of the economy.
So the price may go up, but it will eventually tend toward the natural floor, even if higher than before, taking into account the externalities that were ignored with foreign widgets such as poor working conditions and environmental disregard that happens in certain other countries.
No, the prices will go up. As you said, the cost goes up due to better working conditions, wages, etc...
> The American consumers do have other options — other American companies
Yes, but all of American companies will never go below whatever the Chinese widget costs unless tariffs go away.
Why not? If there are 3 American companies with similar costs, would all of them just say “well, the price is the price?” Or would there eventually be one who realizes they can take more market share from the Chinese companies by undercutting them?
It was probably incorrect to say never, and there is another reply to me mentioning price elasticity which applies here for sure.
> eventually be one who realizes they can take more market share from the Chinese
Yes, on a longer timeline that is possible but in the short to medium term, it doesn't seem realistic for domestic producers to undercut and make profit. Initially you're building factories, refining processes, training workers, etc. which requires capital and investment.
Though, I can’t speak for them, and my opinions on reducing the outsourcing to countries who largely disregard the environment and human rights, are my opinions regardless of their motivations
ALL taxes are like this, you are just arguing against corporate taxes at this point.
By your logic we should just make the corporate tax rate 0% so that we can lower the cost of goods even more.
It’s mind boggling because the same people who lambasted Trump for lowering the corporate tax rate in his first term are now lambasting him for wanting to raise tariffs in his second. But these two actions effectively do the opposite of each other, so if you don’t like one you should be happy about the other.
But somehow people are upset about both.
Tariffs are a tax which have the benefit of basically targeting rich mega corps and incentivizing people to build locally and pay their citizens better wages.
The current system makes it financially infeasible to make most things in our own country because companies are forced to compete with foreign slave labor.
Also think of the carbon impact of shipping everything you buy across the entire world just so that you can take advantage of slave labor on the other side of the planet.
I never lambasted Trump for this and I don't think corporate taxes are particularly effective. I'd rather see something more on the "backend" of earning money like payroll or incomes taxes rather than corporate taxes. They seem like a huge drain for little gain. Especially since rates vary across countries so a corporation could move and game tax structures internationally.
All your arguments about carbon impacts, making things in the U.S. are fine but the whole Trump campaign was railing on how bad inflation has gotten but tariffs would have the worst inflationary impact on everyone. That and Republicans typically don't care about workers' rights or environmental impact so that seems a bit disingenuous to bring up.
Plus, there doesn't seem to be a solid foundation on why we want to bring back manufacturing to the U.S. since we generally want to strive for making more high tech stuff, no? If we suddenly start making lower-level widgets, where are we going to find enough workers to do that without a big influx of immigrants? Immigrants already work the jobs that Americans don't like farm hands.
Fair enough, that was a bit of a tangent.
>Plus, there doesn't seem to be a solid foundation on why we want to bring back manufacturing to the U.S.
Because the US used to have tons of good paying jobs for normal people who didn't need to get a 4 year degree. Everything used to be made here and we had a booming economy which had opportunities for people from all walks of life, including people who can't or don't want to get a 4 year degree.
>Republicans typically don't care about workers' rights or environmental impact
I think this is definitely not as true as many people think, the right has become a big tent at the moment and there are a lot of people in it who do care about these things. Workers rights do align with bringing jobs back to the US, look at how unions voted in the recent election, they superficially supported the left but most of their members voted for the right.
>where are we going to find enough workers to do that without a big influx of immigrants?
Wages go up, more people are able to live a middle class life, people have children.
Also, most of these jobs are becoming automated, your example of farm hands is a good one actually because a ton of farm work is now being done by robots. It won't be very much longer until almost every ag job is being done by robots. So bringing manufacturing back to the US means that the money stays here, people get better wages, and we have a way lower carbon footprint.
And yes, fewer people are employed because of robots but also SOME will still be employed.
We have been hollowing out the middle class by shipping many good jobs building stuff so that the top 1% can take advantage of slave labor on the other side of the planet. It was not a great idea.
Look at how much of a boon it has been for China, they have used the base of manufacturing jobs to bootstrap their entire economy in record time. Now they have so much manufacturing expertise they are able to do things we physically cannot, but we used to be able to build everything.
That time is gone for good. Automation and outsourcing is coming eventually for the Chinese manufacturing sector as well. Being a planned economy, the government is slowing it down however they can.
Manufacturing might come back to the US but it will not be restoring that big pile of good paying jobs for people with no degree.
Not necessarily. The burden of a tax depends on supply and demand price elasticity. If demand is relatively price inelastic, then consumers pay the tax. If it is relatively price elastic, then companies pay via lower profits or reduce supply.
https://www.economist.com/united-states/2017/11/23/american-...
Personally, I'm open to VAT tax because it would be much easier to incorporate the disposal cost into goods and remove externalities (like pollution).
As you've said, it would be ideal to have strategies in place to lessen the burden on people with lower incomes.
This bill doesn't have any of those strategies or objectives.
An example of a regressive tax would be something like cigarette taxes - poor people would actually spend a larger share of their income since they are also more likely to smoke.
Higher income people spend more of their money on investments and other assets.
I’m sure the libertarian’s are rejoicing right now. As is every VC.
So doing some back of envelope math, that corresponds to maybe about a $200 tax savings for the median citizen. But an increase of about $600 on their purchases.
This is an extremely bad deal even if you are moderately wealthy. Income tax is not an ideal tax, but at least by its nature it's leveraged on people with income. But a sales tax affects you even if you are retired. There is no strategic savings strategy you can use to avoid it.
There's an irony that the last election was supposedly about inflation and the economy - but between this, the tariffs, and the (supposed) foreign policy agenda - we're looking at one of the most expensive US administrations sessions ever.
What portion of taxpayers don't pay tax because they make too little compared to those using tax avoidance schemes not to pay tax?
Of the top 50%, what does the tax vs income chart look like?
As income rises, where does spending money come from? Wages, CC, selling stocks/bonds, loans backed by assets (stocks, bonds, etc)
This info could help refine where taxes should go. I have come to accept that a wealth tax would be a good tax to have. I came to this by playing around with the simplistic model at the end of the pudding article linked to below. It approximates the impact of a wealth tax.
I never thought I'd see anarchists being called "Republican".
For as much as I hear about the "deep state" from MAGA, you think they'd want to actually address that by abolishing / reforming agencies like the CIA or NSA.
Prior to the federal income tax (1913), all federal government expenses were covered by duties, tariffs, and levies.
Exactly: we have a superior moral compass. Complexities of society aside, other comments rightfully point out that sales tax has a higher burden the lower the income.
Could probably go further and ask how much it was costing to expand infrastructure? It isn't like they opted for a larger source of income for no reason?
Also during 1862-1872 and 1892-1895.
> covered by duties, tariffs, and levies
Which come with an equally long history of demonstrated problems, like being economically-inefficient and prone to corruption.
That last concern is particularly relevant given the criminality of the Trump administration: How many suitcases of cash does it take to get a special exception for/against your friends/allies?
I'm sure there are people who want to abolish the IRS and also don't want roads or support a military. But if you can get enough of them in a room together to win a caucus I will eat my hat.
Seems like a lot of economic Jenga blocks being removed, with potentially very bad consequences.
Last I checked the government (IRS) had a monopoly on violence.
Yes. I'm shocked you don't see it but you will eventually.
One should also remember that low minimum and median wages are "pre-burdening" the working class, i.e. constitute a different form of tilting the distribution of economic power, and access to goods and services, away from workers. And minimum and median US wages are quite low relative to the wealth of the US as a whole.
not really
https://www.federalbudgetinpictures.com/do-the-rich-pay-thei...
https://taxfoundation.org/research/all/eu/taxing-high-income...
The labrynth of deductions, exeptions and other tax havens for the higher echelons of the income brakets makes the listed rate pretty meaningless.
Blatantly incorrect. 89% of income tax revenue comes from families making $120k or more.
> Corporate tax rates were low and were reduced further
Corporate income tax is a side show. Most money that doesn't get taxed will get paid out either as purchases, salaries, or returned to investors. So either a sales tax, a personal income tax, or a capital gains tax. So a large cut to the corporate income tax only has a small overall effect on the overall tax burden.
which are still mostly working class, i.e. their participation in the economy is through the sale of their labor power for a salary.
> Corporate income tax is a side show. money ... paid out as purchases... returned to investors...
So, not a side show then.
I keep seeing this. Everyone, before you comment on something, maybe check to make sure your understanding of laws/events is actually anywhere near true before making definitive statements. This is how disinformation works.
https://www.nytimes.com/2023/09/07/business/corporate-minimu...
https://www.washingtonpost.com/business/2023/07/03/global-mi...
“On September 12, 2024, the Department of the Treasury (the “Treasury”) and the Internal Revenue Service (the “IRS”) issued long-awaited proposed regulations (89 FR 75062) (the “Proposed Regulations”) on the application of the corporate alternative minimum tax (the “CAMT”), which was enacted two years ago as part of the Inflation Reduction Act (“IRA”). In general, the CAMT imposes a 15% corporate alternative minimum tax on the adjusted financial statement income (“AFSI”) of certain large corporations for tax years beginning after December 31, 2022.”
The US also cancelled a large amount of their debt (previously 96% of the country's GDP was going toward servicing it): https://www.theguardian.com/global-development/2024/nov/06/s...
I don't have any opinion but I do have thoughts about how the US is operating on a very different scale (who will cancel our debt, and at that scale does it matter?).
But I expect if not done with great care, we will be in for a real bad economic ride.
Edit: The more I think about this, this could morph into a Federal Sales Tax, keeping or reducing the Income tax (for the rich of course) as it makes its way through.
It's almost like there's a lot of lead in DC water, since the level of discourse hardly rises above nutty...
That was the point where I stopped investigating Republican positions. Their subsequent actions have demonstrated that it was a waste of time in trying.
This quote feels pretty much what's happening in DC these days. And if one side is being a pigeon, there's nothing the other side can do to force them to work together.
And the worst part is being a pigeon is effective in this day and age of social media. Until the voters actually value mature leadership, we're deadlocked into this shit covered chessboard.
After Katrina, when I got power back, I read people online complaining vehemently about how high gas prices were. Meanwhile, I'm sitting in my house with one path out of the neighborhood that is clear of trees on the road, and no gas because there's no power to the pumps. Lucky me, I had filled up our cars as it was coming in and wasn't scheduled to work for several days after it hit.
My daily drive to get ice (which was being trucked in; it was August in the South) was the only thing I used the cars for.