These are the sort of things the poor and middle class voted for. To make the rich, richer. And then turn around and complain that rich are getting richer and they are getting poorer.
At least tariffs tax consumption rather than production. Taxing production/income is horribly evil and in better times (such as when the country was founded) people who insisted on it would have been shot.
Corporate taxes have the problem of small business paying much more proportionally than large ones and a flat tax on businesses that rely on cheap foreign labor and goods is deserved.
Trump doesn't get to define all of my opinions by me needing to oppose exactly everything he's done.
The problem with the current political situation is the establishment in both parties w were too cowardly or useless to address real problems which are now actually being addressed by objectively stupid fascists.
And that is the lesson to everyone, get stuff done or get replaced by awful people doing awful things.
In the short run, this isn't true: firms have goods they need to move.
In the case of cigarettes and alcohol they are partially “sin taxes” to discourage negative behavior.
In the case of the Trump emergency tariffs, they are seeking to pivot the entire economy.
So there’s a nuance and multiple ways to look at it. If you’re GM, the ability to make better margins on shitty cars is a net positive. If you’re in the technology or medical field, well, you’re fucked.
And applying tariffs to tools and raw materials when you're supposed to be trying to bring manufacturing back to your country is... well, let's just say any government stupid enough to do that isn't likely to improve things in any other respect.
The OP said tariffs are not progressive taxes. You are agreeing with them while believing you are disagreeing.
Further tariffs are not specific to corporations. Individuals pay them. Small business pay them. Large businesses pay them.
It doesn't "benefit the wealthy" because it's not progressive, it benefits the wealthy that have investments in the tariffed industry by distorting the market to their advantage instead of having to be competitive on a level playing field.
The rest of the wealthy are equally annoyed by the tariffs as everyone else, possibly more so as they see their investments tank.
> And that is the lesson to everyone, get stuff done or get replaced by awful people doing awful things.
I don't think that the establishment who benefitted from the status quo actually cares nearly as much as they pretend to while the poor and eroding middle class bear the brunt of the suffering. I doubt rich reagonites and clintonites who made a killing off of deregulation and cheap overseas labour have many regrets.
In any case, it is rare that Americans face consequences for bad behavior of American foreign policy. Hopefully Americans get more engaged and introspective this time around.
You pay for a service and that service has a rate. To think that the only good kind of taxation are those that are progressive is the dumbest thing I ever heard.
If only they invested in venture-backed mass surveillance apps instead
What’s missing from these discussions is the idea of competitive advantage. It is inherently more efficient to grow crops in climates where they thrive, tacking a tariff to protect domestic production means intentionally lowering the standard of living of everyone both domestically and abroad to favor some tiny group doing something wasteful.
It won't: https://en.wikipedia.org/wiki/China%E2%80%93United_States_tr...
We have already observed that the opposite does not hold - in 2017 we slashed corporate income tax by 14% across the board, roughly the same as the tariffs but with far more surface area, and yet prices did not react and the benefits were not passed along to the consumer.
All we _know_ right now is that this is going to negatively impact economic growth by hitting corporations, the same way slashing corporate income tax positively impacted economic growth by benefitting corporations.
If tarrifs on imported goods are high then people choose non imported goods (which might be substitutes for goods which can’t be made in America) as there are no tarrifs.
They are dangerous though. If country A stops selling to US it sells cheaper to other countries. It also stops importing from the US (and chooses subsidies).
Overall everyone loses out - at least in theory, as everyone uses worse substitutes.
Secondly,the point of a tariff in a normal political climate is to bring manufacturing back home. This won't happen in the current administration.
And don't confuse liberals with far left.
I know we don't want HN to devolve into political bickering, but this is a deeply important meta-observation about what's happening in our country right now. Trump's stochastically random decisions are so inscrutable, but his following is so cult-like, that his followers are forced to flail around to try and find any plausible justification for these actions.
You'd think that at some point the sheer effort of this would trigger some sort of introspection, but it never seems to come. Someone, somewhere, latches onto an explanation that's catchy enough, vague enough, and impossible to disprove enough, that the tribe can take the explanation at face value and latch onto it, no matter how thin.
This will be studied for a long, long time.
Fixed prices are a bet on TACO and hoping to avoid the orange rage: see what happens when you blame price increases on tariffs.
Lots and lots of bribes have been paid. This is yet another.
So all that's happened is an exponential increase in the output volume of sweatshops :/
Not true. Producing almost anything in the material world requires raw materials. If any of them are imported, they suffer from tariffs.
IMO, if a consumption tax is what you're looking for, then value added tax (VAT) is a more suitable solution.
You can also support tarrifs in principal but not support the way they have been implemented (club not calpol, used as a political weapon or to extract mafia style favours)
Experts show saving 7.1337% at Walmart is worth losing your job to offshoring!
I haven't seen meaningful change for poor or workers with a decade of Democrat policy, so pardon me while I ignore that and vote for some tariffs.
> Fixed prices are a bet on TACO
Having been part of some of these conversations it's mostly a bet that democrats will win back control sometime in the next decade and do a full reversal. When that happens, you don't want to be caught out with less market share because you adjusted your prices to maintain your bottom line. Same logic as startups burning VC cash on offering free compute, 80% discounts on tokens, etc. to grab market share.
If you're in an elastic market, your priority is not to maximize profit, it's to make the market inelastic.
Like this is philosophical more than political.
What they're trying to decide is (a) do they eat the cost of tariffs in margin or (b) do they raise prices?
That's a decision that doesn't need to be made until they burn through warehoused inventory, but for high-volume businesses (read: retail) it's measured in months at most.
Once that hits, either (a) or (b) will be chosen, and neither is great for equities markets / the economy.
Moreover, there's no "hiding this under the rug" once publicly traded companies begin to report quarterly financial results AFTER burning through their pre-tariff inventory. They can't not explain to their shareholders why they've taken a hit to profitability.
Best possible case is retail prices rise, once, by the amount of tariffs, and that's that.
But a 15%+ price hike is going to be an uncomfortable narrative for those in power who insist tariffs won't raise prices... so I'm not betting that conversation goes logically.*
* See the reaction part of Amazon got when they "accidentally" line-itemed tariff charges as evidence on how dangerous the administration sees transparency around tariff costs
The noise about inflation is very likely propaganda trying to focus people on something that the government can control. (Yet, it looks like the US government is giving up on controlling it.)
Instead, tariffs have complex effects on the real economy. Universal tariffs do cause the concentration of wealth the GP was talking about (but it's way worse than the GP's claim) and deindustrialization. Inflation may or may not happen, it's not a given.
Tariffs are a populist thing, and people seem to think it's just a Trump thing.
If you don't own a stable company, you may still be too poor to benefit from those ones.
1. To preserve strategically important domestic industries (historically: food production and mechanization industry)
2. To shield domestic industries while they're growing to take on already efficient and scaled global competitors
Benefiting labor or saving jobs is probably the stupidest use of tariffs, if one of the above isn't also in play, because it'd be more efficient just to offshore it to low COL countries and instead refocus internal labor.
The slippery slope, of course, is that industries will claim to be included in one of the above, but instead sink their tariff-protected excess profitability into shareholder/self-enrichment instead of business investment.
It'd make more sense to require domestic industries in tariff-protected sectors to invest {near tariff} percentages of their revenue in R&D and/or capital expenses (or be heavily taxed).
Otherwise the government is simply artificially inflating their profitability, at the cost of any consumers of the product.
Food is messy because it's a commodity with a whole lot of substitution-- consumers have a high elasticity as a result.
We are talking about elasticity's prediction for the share producers and consumers each pay when there is a cost structure or tax change. Incidence theory is well validated and fits observed evidence remarkably well, including in 2019 studies of the effects of the 2018 trade war.
But tariff incidence is a micro question. Elasticity analysis doesn’t care whether the world has a demand shortfall or a supply glut. It asks: when a tax raises transaction costs, which side is less able to change behavior? In the long run, suppliers usually have more flexibility than consumers.
Pepsi can’t get glass bottles from 3rd world sweatshops at anything competitive with a highly automated factory. In the vast majority of industries it’s just a question of levels of automation and climate control inherently makes automation easier by reducing variability in temperature and humidity. Of course the original distinction around climate control that created the term sweatshops is dying as such operations are largely dying out, but that only reinforces the notion of automation killing off the inherent advantages of unskilled cheap labor.
The market 'offering' the most demand to the global economy right now is America, by far and away, with a distant second of Europe and Middle East. America has chosen to use tariffs in an attempt to 'tax the demand offered' to the global economy in order to stop the localize debt accumulation of that demand, along with other justifications (rightly or wrongly) of stabilizing global trade and currency.
This is at least the THEORY on Tariffs. Its makes a bit more sense than the 'grrr 1950's trade imbalance' story media keeps spinning, but whatever I'm not going to defend it any more than that.
You can possibly improve trade imbalance with tariffs (though retaliation makes it hard). But it's hard to escape your consumers paying most or all of the costs of those tariffs.
Similarly, military procurement can subsidize relevant industries without impacting the wider economy. In other words you can maintain some domestic steel production etc without impacting the cost of goods.
I'd say the remaining problem left in our analysis is massive inequality in America leading to enormous consumer elasticity in a small ultra-wealth portion. This I can't figure out
Without explicitly and financially tying subsidy-fueled gains to modernization efforts, market participants begin to consider the subsidies as business as usual, plan around them, and get lazy.*
It removes a primary incentive to maintain pace with global technology improvements. Domestic industry whispers in politicians' ears that their global competitors are unfair for reasons X, Y, and Z, and they really need more subsidies to protect them.
{Benefit from politically driving new tariffs / subsidies} must never be higher than {benefit from investing in efficiency increases}.
* Lazy as measured by peak international efficiency, not work. E.g. a farmer who works their ass off manually farming is economically inefficient compared to one who mechanizes most of their work
No, people need to stop repeating it, because it's an extremely stupid anti-tax argument. Tariffs are meant to onshore production and raise wages. Telling half the story is simply lying. You might as well complain about buying food because it costs money. You might as well complain about all consumption because consumption is regressive.
The problem isn't tariffs, you can send that money to poor people. The problem is that nobody cares about poor people, including Trump. A lack of tariffs isn't going to make America moral.
One of the only things Trump is doing unbelievably well on is trade. Tariffs haven't been damaging at all. They should be more damaging, but the US is so dependent on foreign poverty that we have to leave any tariff scheme as filled with holes as swiss cheese. The fact is our manufacturing is so based in the exploitation of low-rights and low paid workers from other countries that entire industries would immediately start failing if we ended up in a real trade war with e.g. China.
> To make the rich, richer. And then turn around and complain that rich are getting richer and they are getting poorer.
These are Koch brothers policies you're advocating as if they're social justice. The reason why every capitalist you know is complaining about tariffs isn't because they make the rich richer (by some method yet to be explained.)
Consequence of that is protection by product group for key products one wants to have locally and not per origin on all kinds of goods.
This can lead to short term wins, but backfire after a while.
As someone selling on eBay from notUSA, the cost increases won’t just be the tariff, but some additional fixed and variable fee for the privilege of determining the tariff and potential loss of the cheapest shipping options.
Friction begets friction!
What's being pointed out is the retcon that "the whole damn point of the tariffs" is to end rampant consumerism. It's clear that the grand^{n}parent poster is flailing about and desperately trying to find the comfort of some coherent and intentional narrative behind a set of inherently incoherent and unintentional actions.
Both of which would still lead to higher prices on the consumer.
> One of the only things Trump is doing unbelievably well on is trade. Tariffs haven't been damaging at all.
I don't know whether to laugh at the absurdity of this statement or to cry because someone could actually say it with a straight face.
1. Targeted specific tariffs aimed at industries we want to protect. Not a flat across the board tariffs on all / most things coming in. The latter IS just a tax on the consumer.
2. Other policies aimed at promoting the said industries. e.g. CHIPS act.
3. Consistency, predictability and stability of policies. No one is going to move manufacturing to the US if they aren't sure if tariffs are going up or down or will get removed entirely on short notice at a whim.
We have none of the above.
They're mostly just a lot more efficient at scale, with a few plants managing close to the whole worlds supply of random shit. Almost all microwaves by all international brands are made by the same Chinese company, all prismatic LiFePo battery cells come out of one of two factories in China, and so forth. Economy of scale on turbo steroids.
Imagine having to compete with Ford by making cars in a garage. Now imagine Ford as the garage shop vs. these factories.
The sweat shops you're thinking of is stuff like clothes manufacturing in other third world countries than the usual suspect. That shit is nasty - breathing and handling acid with naked skin nasty.
That helps explain why chips, cars, airlines, banking etc get subsidized but PVC pipes don’t.
- Allows claiming various benefits like onshoring production, or reduced taxes. This is for the voters.
- Allows threatening other countries' industries with tariffs unless they invest in his friends' enterprises. This is for him.
You can be damn sure they're paying at most a tiny fraction if not zero of any tax rate you'd be paying for that asset as they'd much rather pay very good lawyers, accountants, and most importantly, politicians to not have to pay tax.
You don't need progressive taxes. You just need everyone to pay it equally, without loopholes. Fewer less complicated tax rates are harder to work around.
But ok - yes, sure, in real life it’s a mix and the mix is worth debating. Note also that consumption taxes often have exemptions/reductions to offset the most severe regressive effects.
Elasticity means you can change your amount produced in response to changes in price.
Producers can’t easily change output, so they bear more of the tax burden themselves. But in the long run, producers can reallocate or exit until they’re producing at minimum(average total cost), which makes supply more elastic and shifts most of the burden onto consumers.
This is stuff that's covered in week 4 of a basic microeconomics class. It gets a little fancier with imperfect competition or heterogenous agents, etc, but predicting tax incidence is basically dominated by this even in advanced microeconomics.
…which capitalist is complaining? These tariffs are a regressive tax that rewards political proximity and power. They are also a massive subsidy to our services sector, which is dominated in compensation by finance, insurance, real estate and tech.
Regular people also commit fraud which can make some differences here. But in general it’s the state who decides what something is worth for tax purposes not the individual.
> they own it through some other legal entity that is all negative
Unpaid property taxes result in forfeiture, so again the state’s getting paid here. It’s financial voodoo around other taxes which causes such structures.
> they own it in countries that don't to property taxes
So do regular people, the important bit is where such property is located not who owns it.
If your manager at work acted like a legit insane person, but said one true thing, you wouldn't be there saying that he/she is smart in that particular area.
If by some chance in hell tarrifs actually work, its due to pure luck, not due to any strategy. Which is what the original person I am replying to made it seem.
(I'm not committing myself to the idea, only that it isn't obviously outside the norms of economic thought)
> The communication intent is often to distract from the content of a topic (red herring). The goal may also be to question the justification for criticism and the legitimacy, integrity, and fairness of the critic, which can take on the character of discrediting the criticism, which may or may not be justified.
https://www.theguardian.com/business/article/2024/jul/09/uk-...
Whataboutism would be something like someone from the US arguing that China’s treatment of Uyghurs is bad, and someone from China countering with “well, what about America’s treatment of Native Americans?” The Native American argument isn’t a counter example of the Uyghur argument. Both positions can be true. It’s unrelated. That’s not the case here. You can’t be anti-tariff purely because it’s a regressive tax and also be pro-cigarette tax.
Expecting people to be consistent, and treat similar situations similarly, is not a "gotcha". Challenges like this are raised exactly to hold people to their own standards and question whether they are really okay with the consequences of what they just said.
The topic described is not at all "entirely unrelated". There is a clear natural category which encompasses both tariffs and cigarette taxes.
Then you seemed determined to misunderstand, e.g.
> > But it's hard to escape your consumers paying most or all of the costs of those tariffs.
> I think we agree if I'm understanding you correctly, yes the Suppliers have more elasticity and must ultimately absorb this.
This is really simple fundamental microeconomics stuff. If you want to understand it, there's plenty of sources online. If you want to argue it, you should learn the basics first.
That's the whole point of using that phrase. It's meant to alienate and disconnect. The phrase originated by the left to make any conservative point of view seem alien and "far" away from reality. I'm glad that it can be spread around more evenly. After all, we don't want any one thing disproportionately affecting any one group, do we?
If your intention was to be curious about it, your comments don't convey that.
> Consider if you see everyone around you as the asshole who the asshole might be...
And now you're just effectively calling names.
If you want to talk about economic concepts in a forum like this, you should either ask questions or fill yourself in on the foundational knowledge.
All tarrifs do is remove foreign competition who have lower costs for a variety of reasons, some which benefit the country imposing the tariff, some not.
Neoliberal approach is to always require the cheapest goods, no matter the cost. That’s not the only approach.
Yeah, but it's hard for a regular person to under/overreport a property by, say, 200 million USD, and most people do not have the power to negotiate with or bribe municipalities to get different tax treatment like big companies and the rich people owning them do.
> Unpaid property taxes result in forfeiture
Avoided taxes are not unpaid taxes - we're not speaking of people on the run from debt collectors, but people who cheat their way out of having to pay anything.
> So do regular people
What regular people own properties in foreign countries selected for their tax benefits, for investment or recreational uses?
Most regular people own between zero and one property. Granted, they could move, but it takes extra riches to be able to casually straddle multiple borders.
Expats often chose their location based on such factors.
> people who cheat their way out of having to pay anything.
Good luck finding someone who actually pays zero property tax on US land they own. You’re assuming loopholes exist that don’t.
> it's hard for a regular person to under/overreport a property by, say, 200 million USD
Comparing wealthy taxation is only meaningful based on percentages. There’s definitely people who avoid property taxes by failing to disclose they built a house on undeveloped land thus avoiding 50+% of their tax bill.
Which is hard to do when the idiots in charge place tariffs on the raw materials that both manufacturers rely on.
That wasn't my first clue that a rational and charitable interpretation of the Trump tariffs doesn't exist, but it was a big one.
Take a moment a think about yourself here. Really. “Shut up and don’t ask questions” is a very toxic behavior.
Really. Think. About. This.
It's hard to read emotions via text. I'm reading that -you- seem to be, with periods between each word, short phrases, &c.
> “Shut up and don’t ask questions” is a very toxic behavior.
c.f.
> > If you want to talk about economic concepts in a forum like this, you should either ask questions or...
It just seems like you're not reading the things I say.
You're not answering the question I wrote. Recreational or investment properties in foreign countries, i.e. not a peron's only property in their home country.
Expats pick a country to live and work in. They don't get to pick different countries for income tax, for property tax, for company tax, etc., like a billionaire being a US citizen with a swiss bank account, luxemburg company, luxury vacation homes in e.g., gated communities in Morocco.
(Also note that this isn't a discussion of just property tax, but billionaires avoiding tax in general.)
> Good luck finding someone who actually pays zero property tax on US land they own
Observe the point above - US citizens owning land in foreign countries.
Also, US citizens paying way less by severely misreporting and paying people to look the other way, like the earlier example.
> Comparing wealthy taxation is only meaningful based on percentages.
All taxes should be fixed, unavoidable percentages yes, that is my original argument. Progressive tax doesn't fix things because it doesn't hit the ultra wealthy like people think, as those evade the flippin' thing anyway. Deal with the corruption and evasion, get some proper (and fixed) rates to apply to their business, and you won't need complex progressive tax systems.