Americans Need Spending Cuts, not Tariffs or Taxes

By jdoms @ Adobe Stock

You may be hearing that tariffs are a good replacement for the income tax, and for some people, that could be superficially true, but the real problem faced by Americans is not a lack of government revenue; it’s an overabundance of government spending. Former congressman and presidential candidate Dr. Ron Paul writes:

Replacing with tariffs what the government raises from income taxes may require raising tariffs even higher than President Trump’s “liberation” tariffs. This would cause more price increases and encourage other governments to retaliate by raising their tariffs, further disrupting supply chains and leading to even higher prices and shortages. The negative impacts of tariffs could dwarf the benefits of lower, or even no, income taxes.

Consumers can try to avoid tariffs on goods. Massive avoidance of tariffs could lead to the imposing of higher tariffs or new taxes. The reason politicians must play the game of “offsetting” tax reductions with tax increases is they refuse to make meaningful reductions in government spending. The politicians’ favorite tax is the Federal Reserve’s inflation tax because it is hidden. It is also regressive, making it the worst type of tax.

The media and big spenders in both parties are screaming about how President Trump’s budget proposal contains large reductions in federal spending. However, even if all of President Trump’s 163 billion dollars of proposed cuts are enacted in law, the federal government will still spend about 1.7 trillion dollars next year in its “discretionary” budget. The cuts would be less than eight percent.

While President Trump is proposing many necessary cuts in federal agencies and programs, including those concerning the use of taxpayer money to promote “wokeness,” his budget increases military spending to around a trillion dollars. It also makes no changes to Social Security or Medicare. This means President Trump’s supposed radical spending plan does not reduce spending on three of the four largest items in the federal budget. The fourth is interest payments on the national debt, which Congress cannot reduce except by cutting spending.

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