Tag Archives: taxes

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.

Circularly Self-Serving

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Or self-servingly circular. You decide.

The IRS, this time at President Donald Trump’s (R) behest, is moving to block the trial of a couple of IRS whistleblowers who are suing the agency over its non-payment of whistleblower rewards they believe are owed them over their exposure of alleged tax irregularities inside Bill and Hillary Clinton’s foundation.

“In this case, the Whistleblower Office denied petitioners’ claims because the petitioners’ claims were never considered in an IRS action. Here, the Whistleblower Office forwarded petitioners’ claims to a classifier,” the IRS motion to dismiss argued last week. “Following the classifiers’ preliminary review, the Classifier declined to forward petitioners’ claims to exam and recommended that it be forwarded to the CI [criminal investigation] division.
“The IRS did not proceed with any potential action when it investigated petitioners’ claims,” the IRS added.

The IRS’ claim is this: we didn’t do anything about the beef, therefore, there is no beef about which to sue us.

This is one more example of an agency’s adjudicative facility being judge, jury, and executioner at the direct expense of justice for the individual(s)—or justice for the people if a proper Article III court were to find for the agency.

Raise Those Taxes

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Progressive-Democrat-run States are looking at ways to cover putative budgetary shortfalls.

  • Minnesota State Representative Aisha Gomez, a Democrat…sponsored legislation that would implement a higher tax rate for joint filers in Minnesota making over $1 million a year if federal Medicaid cuts take effect
  • Connecticut legislators have proposed a bill that would raise income-tax rates on couples making at least $500,000 and individuals making at least $250,000
  • Washington Governor Bob Ferguson, a Democrat, in May signed into law a budget that includes an increase in the capital-gains tax, among other things
  • Maryland Governor Wes Moore, a Democrat, in May signed into law his tax proposal, which includes higher income-tax rates for state residents making more than $500,000 a year
  • Rhode Island in June imposed a new tax on certain vacation homes valued at $1 million or more

And this:

Many states face projected budget deficits after increasing spending and cutting taxes in the flush postpandemic years….

Notice that. Profligate spending leads to revenue shortfalls, so—raise those taxes, especially on the rich, who Owe Us. That’s akin to a business losing money, so it raises the prices it charges for its products.

Nowhere in there is any Progressive-Democrat-run State reallocating its spending to stay within existing revenues, much less cutting spending to do so.

I repeat a long-standing challenge of mine: can any Progressive-Democratic Party politician even say the words, “Cut spending?”

TACO Trump?

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Trump Always Chickens Out goes the latest anti-Trump meme of the Left. This graph tells a different story.

All of those latest agreed/imposed tariffs are higher than the original tariffs.

Keep in mind that Trump is, from the beginning, a builder who learned his trade in the blunt-speaking, trash talking New York City environment and a marketer who learned negotiating in that same environment.

The best deals are made by a marketer who begins the negotiations with an already clearly understood price range within which he’s willing to close a deal and outside of which is willing to walk away. The marketer then begins with offers that are extremely low on proffered buys and extremely high on proffered sales and lets himself be talked up/down toward his already determined range in exchange for more things from the prospective seller or buyer.

This is what that graph illustrates.

Distortions by Progressive-Democrats

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The latest are illustrated by two graphs from The Wall Street Journal. The graphs illustrate the impact on us taxpayers—rich and poor—of the recently passed tax cuts in the One Big Beautiful Bill Act.

The first shows in dollar terms the impact of the tax cuts.

Progressive-Democratic Party politicians favor this graph because it emphasizes dollars while ignoring both their importance to the taxpayer relative to his income and it ignores the percentage of income received by each taxpayer and the percentage of the tax burden paid by each taxpayer—which for the rich is a larger percentage than their percentage share of income earned.

The second illustrates the changes in percentage terms, which demonstrate the importance of those dollars to taxpayers’ incomes.

Overall, the tax cuts become more important as income level drops from the wealthiest to the poorest. Those with increasingly lower incomes receive increasingly higher tax reductions relative to their incomes, with the poorest getting the greatest relative reductions. The Evil Rich—the top 20% of income earners—get far smaller relative tax drops, with the Evilest Rich—those heinous top 1% of income earners—getting the smallest relative drop.

And that’s entirely appropriate since they start out with the largest tax burden, one that’s much larger even than their relative share of income. This is a detail that Progressive-Democrats actively ignore in their distortionate descriptions of the bill.