DONALD TRUMP PROPOSES ELIMINATING THE INCOME TAX AND INCREASING TARIFFS TO REPLACE THE REVENUE
In early June, former President Trump proposed to eliminate the income tax and replace the revenue with increased tariffs.
Trump's proposal involves:
- Eliminating the federal income tax entirely
- Implementing high tariffs on imported goods to generate revenue
- Further reducing the corporate income tax rate
The D.C. elites were horrified. They pointed out all the economic reasons why this wouldn’t work. Here are some of their reasons:
- An average tariff rate of 85% would be required to replace that much lost revenue.
- This would increase prices to the American people by 85%.
- Other countries would retaliate by imposing tariffs on our exports. Such a move would cripple our exporting companies and cause great harm to the American economy.
- It would be extremely regressive because the main burden would fall on lower income people.
The above criticisms are valid. There are many legitimate reasons to oppose imposing tariffs of that magnitude. The main reason is that there is a simple and better way to replace the income tax—the FAIRtax.
Why the FAIRtax is preferable to raising tariffs was extensively covered in the January 19, 2024 Chairman’s Report entitled PRESIDENT TRUMP YOU DON’T NEED TARIFFS—YOU NEED THE FAIRTAX!
The following is excerpted from that article:
Almost everyone agrees, if a U.S. tariff is applied to imports, our trading partners, will reciprocate with a 10% tariff on U.S. products imported into their country. This 10% tariff will be added to the selling price of the product and paid by American consumers when they purchase the product or a product containing the tariff product.
The U.S. exporter is already exporting goods whose prices are inflated by 15%-25% because of the cost of the income/payroll tax system. Now the price of his product would be increased by both the VAT and an additional 10% tariff tacked on in the receiving country.
True, a country exporting to the U.S. will see the price of their product increased by the 10% tariff. However, this will simply make the product more expensive and the cost of the tariff, like any other tax, will be passed to the consumer who will pay it in the price of the item.
Contrast this dismal situation with life under the FAIRtax:
Why the FAIRtax is preferable to raising tariffs was extensively covered in the January 19, 2024 Chairman’s Report entitled PRESIDENT TRUMP YOU DON’T NEED TARIFFS—YOU NEED THE FAIRTAX!
The following is excerpted from that article:
Almost everyone agrees, if a U.S. tariff is applied to imports, our trading partners, will reciprocate with a 10% tariff on U.S. products imported into their country. This 10% tariff will be added to the selling price of the product and paid by American consumers when they purchase the product or a product containing the tariff product.
The U.S. exporter is already exporting goods whose prices are inflated by 15%-25% because of the cost of the income/payroll tax system. Now the price of his product would be increased by both the VAT and an additional 10% tariff tacked on in the receiving country.
True, a country exporting to the U.S. will see the price of their product increased by the 10% tariff. However, this will simply make the product more expensive and the cost of the tariff, like any other tax, will be passed to the consumer who will pay it in the price of the item.
Contrast this dismal situation with life under the FAIRtax:
- The FAIRtax is clearly a border-adjustable tax under the World Trade Organization rules.
- Products will be between 15%-25% cheaper because the cost of the income/payroll tax system is no longer included in their prices.
- Products will be 15%-25% less expensive in the U.S. and 12%-25% less expensive when exported because the FAIRtax only applies to the retail purchase of new goods and services in the U.S.
- Imports will be subject to the same 23% FAIRtax as domestic products. This will eliminate a huge advantage foreign producers currently have over U.S. producers selling products in the U.S.
- This will lead to more production and more jobs in the U.S.
No need for tariffs.
No need for a trade war paid for by the U.S. consumer.
The choice is easy—do we want a system for funding the federal government:
No need for a trade war paid for by the U.S. consumer.
The choice is easy—do we want a system for funding the federal government:
- That is so simple everyone can understand it.
- That shows the costs of the federal government on every retail receipt so all of us understand what we are paying.
- That helps U.S. companies compete with foreign competitors.
- That keeps jobs in the U.S. rather than exporting them to other countries.
- That permanently establishes the solvency of Social Security and Medicare.
- That eliminates special treatment for any group of taxpayers.
- THAT IS THE LARGEST TRANSFER OF POWER FROM D.C. TO THE PEOPLE SINCE THE CONSTITUTION WAS ADOPTED.
CONCLUSION
It is interesting to note that all the people attacking the proposal to replace the income tax revenues with tariffs don’t try to defend the income tax. This is an election year and even though Biden and his mental lapses have dominated the news cycle, why didn’t Biden attack Trump’s proposal at the debate or at any number of other campaign appearances?
The reason is clear. Both Republican and Democratic polling data shows that the income tax is very unpopular with voters of all political leanings. The Democrats don’t want to attack Trump’s plan because doing so would put them in the unenviable position of having to defend the income tax.
President Trump, everyone except those in the D.C. bubble love the idea of eliminating the income tax. But imposing tariffs is not the right way to replace the revenue. The right way is to pass the FAIRtax.
High tariffs across the board, not targeted on those countries who restrict U. S. exports, will start a trade war and no one wins. The FAIRtax would bring about unprecedented economic growth.
The American people will overwhelmingly support the FAIRtax if they are given the chance and all of us will benefit.
President Trump, you want to eliminate the Deep State. One of the pillars supporting the Deep State is the federal income tax. ELIMINATING IT WILL BE THE LARGEST TRANSFER OF POWER FROM D.C. TO THE PEOPLE SINCE THE CONSTITUTION WAS ADOPTED.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.
THE SOLUTION—PASS THE FAIRTAX!
Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations? The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?
There is going to be a vote on the FAIRtax in the House of Representatives.
We now have the opportunity to force all Members of the House to show where they stand. They can:
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
THE SOLUTION—PASS THE FAIRTAX!
Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations? The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?
There is going to be a vote on the FAIRtax in the House of Representatives.
We now have the opportunity to force all Members of the House to show where they stand. They can:
- Vote for the present income/payroll tax system or for the FAIRtax.
- Support the corrupt income tax and the IRS or eliminate it. It can’t be any simpler than that.
- Hide the true cost of their government or pass the FAIRtax and show everyone the true cost of government on each retail receipt.
- Support the largest transfer of power from government to the people, the FAIRtax, or not.
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments), these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital for all future years.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.