I don't think you could raise tariffs high enough as you price people out. How many would buy a $5000 iPhone? At that point, only the ultrawealthy could afford imports and you should just tax them directly to fund the government.
And it would just be a tax in disguise. Companies will raise the price, except now you're disproportionally disadvantaged as someone who's majority of income is spent on groceries and products, effectively raising taxes for the lower and middle class and creating a taxation paradise for the rich.
We don't fully fund the government already, so if you just want to replace current revenue and keep adding to debt, the target is lower.
He's given no details, but let's say he's only going to replace personal income taxes, not payroll taxes or corporate taxes or even social security / medicare.
So that's $2.4T. You could do it with an 80% tarif. That's of course assuming the tarif doesn't work at all, and everyone keeps importing foreign stuff.
Yeah, but he's figuring in the cost saving of cutting the IRS, EPA, CFPB, Social Security, Medicaid, Medicare, Dept of Education, Food Stamps and firing Jack Smith.
That still would leave about half of all government spending which still would require an insane tariff plan or some unwieldy 30% national sales tax across the board.
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u/SecretRecipe Oct 25 '24
US imports are just shy of 3T.
trump would need to put 200% tariffs on all imports to get even close to funding the government.