Trump Floats Elimination of Income Tax

[teekay99]

I don't think that was ever a point of contention by anyone.

Now give me a number rather than a concept.

42

 

[Onoya]

From Fox Business:

Trump says Americans may soon pay ‘no income tax’ as White House explores alternative revenue streams

President Trump proposes eliminating income tax entirely, suggesting tariff revenue could replace traditional taxation in ambitious economic overhaul plan.

www.foxbusiness.com

What follows is an economic argument, not a political argument. Please use the politics sub forum to make a political reply.

Eliminating income taxes and replacing them with revenue from tariffs essentially converts our tax system to a consumption tax (like a sales tax). Economicly, consumption taxes are less efficient as they directly impact consumer demand. Tariffs are generally passed on to the consumer and raise the price of imported goods. Some consumers are then priced out of the market or substitute with cheaper products. Tariffs reduce demand especially for products with high elasticity. Tariff income may thereby be reduced.

A fundamental economic principle is that consumers and suppliers respond to incentives (or disincentives). Tariffs may cause a a shift back to domestic products or a degree of onshoring. This activity may further reduce income from tariffs.

Replacing the income tax with tariffs may be a more optimistic idea than it actually turns out to be. And either way, Americans are still paying a tax. Arguably, tariffs impact lower income Americans harder in terms of disposable income.

Also, doing that would result the US gov to be HEAVILY dependantd on import number?

Isn't that dangerous to rely too much on a thing that you can't really control? Like if Trumps does that, but there is a suddent drop in import coming to the USA, then the government would have a sudden drop of income

 

[DEFCON Warning System]

42

But what is the question?

 

[DarkNoon]

I don't think that was ever a point of contention by anyone.

Now give me a number rather than a concept.

Big, profitable companies should not have effective tax rates lower than their own employees BARE MINIMUM,

 

[DEFCON Warning System]

Big, profitable companies should not have effective tax rates lower than their own employees BARE MINIMUM,

That is not a number, but let's roll with it.

So you would be okay and have no complaints if a big, profitable company had a tax rate of 19%, which is the average percent US workers pay. (That includes Federal tax, Social Security, Medicare, everything.)

 

[intel-bank]

The problem with taxing the rich is how much of their wealth is tied up in unrealized gains. So I actually think that wealth taxes should be in the form of property taxes on houses or stocks or other assets, even if those gains are unrealized. This is likely the only way we can get the rich to pay their fair share because people misunderstand the wealth of rich folks. Income tax is not the best way to tax the rich anymore as most people making a true salary are not super rich. In the K shaped economy, those who own assets with unrealized gains have an unfair exception to having to pay tax on those gains. And they simply get loans if they need money instead of selling those assets so capital gains taxes are also not properly equipped for the job.