The piece to add there is that all this money is getting paid by the consumer. The overseas piece doesn't change, same number of US dollars going to the other country. The $24 increase in cost is paid by the US consumer.
* Domestic consumers and companies are incentivized to potentially go for the 2nd best product. This over time can impact productivity as the tooling will decline over time as inferior solutions are bought.
* Reduced competition. We've seen this with the 25% "chicken tax" on pickup trucks. Arguably one culprit in US automakers falling behind is that they had a protected market around pickup trucks where it was hard to impossible for foreign competition to keep them on their toes. So US automakers retreated more and more into this safe haven.
* Destruction of economies of scale: If everyone wants the entire supply chain to be replicated in their country, we obviously loose economies of scale and thus efficiency. This sounds like it would be small but having multiple Shenzhen's is just not viable and we'll have to deal with higher prices and less product choice.
* Galapagos island syndrome: Over time separation of markets can lead to incompatible technologies which amplifies all other points.
There are still stupid edge cases. The cake-versus-biscuit saga in the UK comes to mind.
Flat rate sales tax has its problems, but avoiding Jaffa cake situations is entirely desirable.
The way they are done in the US is maddening. You go to the counter and find the price is higher than the tag price by some random amount. It seems to vary wherever you go and depend on what you buy.
A tariff might actually be better.
It makes the taxes visible and painful and they will therefore (potentially) not rise as fast or as much.
But yes, that’s exactly why the American right makes taxation so cumbersome and horrible: to make people think that taxes are bad, as there’s this assumption you can have civilization without paying for it.
Need to balance transparency in pricing vs. visibility of taxes. I don't think sales taxes are actually all that visible most of the time- it's not like the cashier is telling you "and your taxes are $X." But it does make it much harder to detect if the store is charging you more than list price.
A Made in USA shoe that sells for $100:
- $7+ goes to the US gov't (? shoemaker tax, 3 Nike tax, 4 Footlocker tax)
- $79 goes to US employees or businesses (46 to shoemaker, 5 Nike marketing, 11 Nike expenses, 17 Footlocker expenses)
- $7 goes to Nike (11% return, 7.15 exactly)
- $7 goes to Footlocker (8% return, 7.45 exactly)