Looks like The bill to abolish the income tax in the US has been introduced!...
"H.R.25 - To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily..."
(www.congress.gov)
Let's GOOOOOOooo
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Why not get a stable income from tariffs, and then reduce the taxes? As manufacturing comes back, tariff income will grow - and our Fed taxes would fall. This is going to rebalance the economy.
Dramatically changing things, without any attempt to control things - is like jumping on the bathroom scale. Everything will fluctuate wildly.
Who do you think pays the tariffs, exactly?
Those who buys those goods. No one forces you to buy cheap Chinese wrenches. Unless you want to.
Exactly. But it's not just cheap Chinese wrenches. The US has basically no domestic manufacturing now. So unless we all plan to go the Amish route, we'll be paying tariffs on almost everything we buy.
So u/Hodar is saying that the government needs to be making a steady income on tariffs before they reduce our taxes. So we'll be paying tariffs and taxes at the same time?
But then they say that as manufacturing jobs come back to the US, the government will be getting even more income via tariffs? How does that work?
Fair question. Say tax rate is 22%, and we have an idea after a month or so of what tariff income is, then tax rate drops to ~15%, then a quarter later we see oil, and production increasing. Drop taxes to ~10% Review data, and adjust. It's going to balance out at whatever the new equilibrium point well be. Eventually, taxes will be zero, as manufacturing increases.
Just like dieting - you make minor changes - you don't go on a starvation diet right off the bat.
At first, the US consumer. Then, as US manufacturing, oil production, energy production ramps up - American goods will be in direct competition with overseas - and being a US produced good, will be exempt from the tariff.
Then, US goods will be cheaper than imported. It's not a solution solved overnight.
Being exempt from tariffs isn't the same as growing income from tariffs, which is what you first said.
How exactly will the government be making money on people not paying tariffs?
Capitalism is the engine that will drive everything. We can make cars in the USA cheaper than made elsewhere. Volume production results in lower prices.
While people are paying REDUCED taxes, you employ more people. Like I said, it's going to be a balancing act as we transition from an income tax, to lower taxes and Gov't funding via tariffs.
Nobody knows for certain what is coming, or where the new equilibrium will be - so I would rather a soft landing, over a hard landing.