What Do I Think of Tariffs?
The subject of Tariffs is not the complex subject it may seem. Tariffs are a sales tax. Tariffs drive the cost of imported goods and services higher. The United States would be far better off if it controlled fiscal spending and replaced income taxes (for people and businesses) with an explicit sales tax or tariffs. Doing so would give people and businesses discretion over how taxes were levied upon them.
If a Trump Administration proposed eliminating income taxes and replacing them with tariffs, I would 100% support such a plan as would every small government American and Austrian Economist. I would also favor a tax proposal that cut income taxes by 25-50% that was augmented by a tariff plan.
At present, the Federal Government takes its cut off the top by taxing income – a tax that was once illegal. We have Woodrow Wilson and his awful fiscal policies to thank for the income tax, which strangles GDP growth.
Why does the Federal Government exist? There really is not a function that the United States Government performs that could not be performed by the States, either individually or collectively. The United States was founded upon the principles of Natural Law and decentralized government, where self-governance and personal freedom were supreme. After the family unit, local government was to be the most powerful branch of government, followed by state government and eventually Federal. Instead, that paradigm has been turned on its head.
The civil war was a war fought over state sovereignty. The north wanted the Federal Government to reign supreme over the states - to create a centralized bureaucracy - which was not what the Founders intended. Lincoln is one of the worst Presidents for this reason, up there with Woodrow Wilson, FDR, LBJ, Nixon, GW Bush, Obama and Biden – each of whom dramatically grew the powers of the Federal Government at the expense of the people.
Replacing income taxes with tariffs would do enormous good in terms of enabling Americans to build personal wealth and in terms of repairing the nation’s fiscal health. Putting Federal Government spending on a radical starvation diet would be a much needed concurrent step.