Tag Archives: taxes

Wrong Distinction

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There’s a new challenge, allegedly, for grocers and their junk food sales; although their problem is whether, and if so how much and where, they should stock junk food on their shelves. This is suggested by the headline:

Is a Cookie a Type of Candy? Supermarkets Have a New Food-Stamp Conundrum

This is a trivial question, though, one that awaits only a government definition of what foods are eligible for food stamps. The larger, and the far more serious problem is posed by this claim, buried in the middle of the article:

Critics said that limiting grocery options ignores the real causes of poor diets, such as low incomes, high food prices and access to healthy food. Studies, they said, show little difference between what SNAP recipients buy and the purchases of non-SNAP households.

Say the critics are correct, and food stamp food eligibilities don’t address those root causes. Say, further, that those studies are accurate in their conclusions.

Those criticisms are wholly irrelevant. The fact remains, and it remains unaddressed, as well, that there is no reason for the rest of us to pay with our tax dollars for the poor diet choices those eating on our dime—those food stamp programs—make. If they want those junk foods, let them pay for them on their own dime, just as the purchasers in non-SNAP households do.

How dare we presume so, some might bleat. It’s a simple dare. We’re the ones paying and with our money. We’re the ones who should be determining how our tax dollars are spent.

It’s that straightforward, and it should be that simple.

Rich Want to Pay More Taxes

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At least, that’s the claim of Tom Steyer and Mitt Romney. On this, The Wall Street Journal‘s editors are on the right track.

One curiosity of democracy is the rich citizens who tell politicians to raise their taxes. It’s the patriotic thing to do, they [not only Steyer and Romney] say.

And

The rich who favor higher taxes pitch this as an act of civic virtue.

Of course, both Steyer and Romney refuse to specify what a rich man’s fair share is, or how much more is more enough. Still it’s not like rich folks other than these two don’t pay more enough already. This graph makes that clear.

In the end, there’s nothing stopping these two virtue-signalers and their buds from paying more into the Federal Treasury on their own initiative. It would be a simple matter to have their accountant write the check. That they won’t, that they get quite indignant at the suggestion, demonstrates their insincerity and their authoritarian demand to impose their personal views on all the other rich folks around them.

Apparently, it’s patriotic enough to natter on about the situation, and civic duty is fulfilled by yapping.

Right Idea, Bad Plan

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Progressive-Democrat New York City Mayor-elect Zohran Mamdani wants to send $6 billion of city taxpayer money to a fancy, glittering new infrastructure of child care centers that he wants to build so mothers of small children—6 weeks old to 5 years old—can get back to work. (As if mothering children isn’t work in its own right, but that’s beyond the scope of this article). Erica Komisar, a psychoanalyst, wants that money sent, instead, directly to the parents for their use in raising their children their way.

That’s the right idea, but it’s a decidedly suboptimal plan.

Instead, reduce the city’s taxpayer bill by those $6 billion. Let all of the city’s taxpayers hang onto their money, instead of giving it up to the city’s government for spending on the favorite programs of whomever happens to be sitting in Gracie Mansion. Those parents of toddlers will benefit at least as much, from the increased city economic activity that tax reduction would generate, activity that would include increasing job availability; increasing wages; increasing availability of child care and babysitters at prices those parents actually could afford; increasing availability of employer-provided child care, not from government mandate but from it being a good business practice.

That economic flow-through won’t quickly develop; there’s a lot of economic destruction from prior city administrations’ Big Government impositions that needs to be corrected. That, though, simply puts a premium on getting a $6 billion reduction in city taxes enacted.

Some Thoughts on Tariffs

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The Wall Street Journal‘s editors have twisted their panties on tariffs, again, this time showing their lack of understanding of tariff rebates to us low- and middle-income American citizens (in addition to their lack of understanding of tariffs as foreign policy tools. That President Donald Trump (R) has muddled that use is not an excuse for the editors’ failure).

Begin with a couple of things the editors have elided.

President Donald Trump (R) early on said tariffs would let him reduce income taxes—something the editors completed ignored in their present missive. Trump wants to give a $2,000 tariff rebate to us American citizens. While this isn’t a direct reduction of our income taxes, it certainly offsets that much of each of our income tax bills. As a first step in reducing income taxes, it’s not bad.

Then there’s this:

In arguing [before the Supreme Court] that tariffs aren’t really taxes and are mainly a tool of foreign policy, Mr Sauer said “these tariffs, these policies, it is clear that these policies are most effective if nobody ever pays the tariff. If it never raises a dime of revenue, these are the most effective use of these—of this particular policy.”

Sauer went on to say that these foreign policy tariffs do, in fact, generate revenue, but that’s deeply secondary to their purpose, which is to persuade the tariffed nation to change its ways. The editors acknowledged that in an earlier editorial, though only by deeply burying it near the end of that piece. This time, the editors completed elided it.

Then there’s this bit of illogic, even as the editors deride the Trump administration’s logic.

If tariffs are most effective if no one ever pays them [as Sauer also argued], then how are they going to raise the revenue Mr Trump needs to pay those rebates?

Here the editors are exposing the fantasy of their world. “No one” ever pays tariffs because they work perfectly, nations are persuaded, and Hallelujah. No. The world isn’t an ideal place, no foreign policy measure ever works perfectly, friction occurs, and nations adapt according to their own imperatives. Foreign policy tariffs will still raise revenue, even as they do move nations to change, if not completely so, in desired directions.

Finally, this bit of editorial foolishness.

This is a teaching moment for a high school logic class. Start with the contradiction that Mr Trump can both pay a tariff rebate and pay down the national debt. The annual federal budget deficit is roughly $1.8 trillion even with tariff revenue, so paying a rebate would add to the national debt, not reduce it.

Start with the derision of Trump both paying a tariff rebate and paying down the national debt. Of course, both can be done. The rebate won’t, of necessity, absorb all of the current tariff revenue raised, and there’s no reason to expect it to do so in the future. Tariff revenue easily can be committed to, and split between, both goals.

And this: paying a rebate would add to the debt? The editors announce this as received wisdom, declining to provide any facts or logic to support their announcement. That’s because they cannot. The debt arises from spending more of individual and business taxpayer money than the government receives in individual and business taxpayer money. Tariff money is outside of that path. Even if foreign policy tariff revenue were taxes, their expenditure is outside the citizen and business tax revenues the government receives, and spending that revenue adds nothing to our national debt, even if all of the foreign policy tariff revenue were committed to rebates.

And this, straight from the horse’s mouth (which postdates the editors’ missive):

All money left over from the $2000 payments made to low and middle income USA Citizens, from the massive Tariff Income pouring into our Country from foreign countries, which will be substantial, will be used to SUBSTANTIALLY PAY DOWN NATIONAL DEBT. Thank you for your attention to this matter! President DJT

A Mixed Message

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President Donald Trump’s (R) tariff program is before the Supreme Court (oral arguments were heard last Wednesday), it appears to be in trouble, and I claim it’s due to his mixed messaging to us in the public.

I have long argued, especially during Trump II’s tariff implementations, that there are two purposes for tariffs, and so two kinds of tariffs. One kind is protectionist tariffs, tariffs implemented to protect domestic industries, especially those in their nascent stages and those that are national security critical. Protectionist tariffs are, in the main, badly mistaken for a variety of reasons; although, an argument can be made that protectionism related to national security is a cost of national security that must be paid if we’re to remain free as a nation.

The other kind of tariff is that used as a foreign policy tool, tariffs applied in order to persuade another nation or bloc of nations to desist from their unfair trade practices, viz., dumping product at below cost, unfair subsidies of their own domestic industries, withholding export of products critical to the importing nation’s economy or national security, or other policies to which the tariffing nation might object.

Trump has been busily touting both the revenue raised by all of his tariffs, of both kinds, while also insisting that they’re necessary foreign policy tools intended to get other nations to leave off their unfair trade practices, to “stop ripping off America,” and to mend their ways on other matters.

Which brings me to the present article by The Wall Street Journal‘s Greg Ip.

Lawyers often stretch the facts to make their case, but even so, this was quite the howler from US Solicitor General John Sauer in defense of President Trump’s tariffs at the Supreme Court on Wednesday: “They are not revenue-raising tariffs.”

Ip, with that lede, stripped his Sauer sentence of its context. The rest of what Sauer was saying is that their purpose, as a foreign policy tool, is to persuade the targeted nations to change their ways. That these foreign policy tools also happen to produce money is deeply secondary. Ip later acknowledged that, but not until deep into his piece. Sauer again, originally:

“The fact that they raise revenue is only incidental. The tariffs would be most effective, so to speak, if no person ever paid them,” because they would have achieved their goal of changing another country’s behavior, or diverting all American purchases away from imports to domestic goods[.]

And that’s the problem with Trump’s rhetoric here. He’s made no distinction in his program between tariffs as protectionism and revenue-raising, the latter which is a Congressional prerogative and not Executive, and tariffs as foreign tools, which is an Executive prerogative and not Congressional.

This is a milieu where Trump’s studied vagueness in his rhetoric may well backfire. Keeping adversaries suitably confused as to our intentions through ambiguity can be highly useful. However, American law, and so our courts—especially our Supreme Court—deal in clearly stated specifics within each case that comes before them. Vague, especially, internally conflicting, speech is properly disdained by judges and Justices.

Trump’s contaminating his use of tariffs as foreign policy tools with his use of tariffs as protectionist policy may well produce the elimination of his tariff program in toto. That would be to our nation’s economic ill, and to our nation’s national security detriment.