Trump wants to eliminate income tax, but replace it with tariffs on imported goods.

[Skylar]

Trump knows nothing about macroeconomics. He begged the Fed for MORE inflationary QE and to smash down interest rates even MORE. His tariffs put American manufacturing into an extended recession during his term.

He ran with Daddy's money and bank loans to create an imaginary business celebrity.

The rubes will never get this, the shameless congressional sycophants will never admit it, but he is not doing any of this for them or America. These fools are creating another French Revolution with their ignorant cult.

https://www.reuters.com/article/idUSKBN1WG4IT/

Trump calls on Fed to cut rates by 1% and urges more quantitative easing

In a two-part tweet, the president says more easing would make the economy "go up like a rocket."

www.cnbc.com

That's another part of Trump's plan that is so spectacularly bad.

We saw a worldwide inflationary spike in 2021/22 as the world economy started back up after COVID. There are only two major ways government can combat inflationary spikes.

The first is draconian government spending cuts. Double digit reductions annually. That's not happening under Biden or Trump.

The second is increases in the Fed Funds rate. Both have the effect of constricting money supply. Reagan knew this. Thatcher knew this. Which is why they both made massive increases to the fed funds rate (or the UK equivalent) to slow their economies. They are generally regarded as having overdone it, with a fed funds rate peaking at over 13%. But when the US economy started back up, inflation was under control.

Biden and Powell have taken a much more measured approach, increasing the fed funds to about 5.5%. It has the impact of slowly reducing inflation without sending us into a recession. The results have been solid. Our economy is leading the world at the moment.

Our inflation NOW is lower than Reagan's inflation rate AFTER the US economy came out of the 81-82 recession. With 1983 seeing an inflation rate of 3.8% (down from a peak of 12.5 in 1980). And our inflation rate today at 3.3%.

Trump's proposal....is to massively CUT the the fed funds rate. Which would fuel a SPIKE in inflation. Not a reduction.

 

[Skylar]

It won't happen. It is not something Trump can do on his own.

Income tax was authorized by the 16th amendment. It would take another constitutional amendment to remove it.

Income tax was already authorized under the constitution. The only requirement was that income taxes be apportioned by population. The 16th amendment permitted income tax without apportionment. It didn't require it.

Income tax is completely within the power of congress to abolish if they so wish.

It would be dumb as fuck. But they could do it. No amendment required.

 

[Mac1958]

That's another part of Trump's plan that is so spectacularly bad.

We saw a worldwide inflationary spike in 2021/22 as the world economy started back up after COVID. There are only two major ways government can combat inflationary spikes.

The first is draconian government spending cuts. The second is increases in the Fed Funds rate. Both have the effect of constricting money supply. Reagan knew this. Thatcher knew this. Which is why they both made massive increases to the fed funds rate (or the UK equivalent) to slow their economies. They are generally regarded as having overdone it, with a fed funds rate peaking at over 13%. But when the US economy started back up, inflation was under control.

Biden and Powell have taken a much more measured approach, increasing the fed funds to about 5.5%. It has the impact of slowly reducing inflation without sending us into a recession. The results have been solid.

Our inflation NOW is lower than Reagan's inflation rate AFTER the US economy came out of the 81-82 recession. With 1983 seeing an inflation rate of 3.8% (down from a peak of 12.5 in 1980). And our inflation rate today at 3.3%.

Trump's proposal....is to massively CUT the the fed funds rate. Which would fuel a SPIKE in inflation. Not a reduction.

He has no interest in anything other than getting votes. That's it.

I suspect that this particular "idea" is just a trial balloon, one that he'd reverse in a second when challenged. Since his words only last about nine seconds.

The problem here remains the same, and will only be magnified if he wins again: The voices around him, like Bannon and Miller, and a shamelessly compliant Congress.

World history shows us this is never about one person. It can't be. It's about those who enable them.

 

[excalibur]

Lets go with the half you said it was. 2.5 trillion. That means that the percentage of GDP in tariffs would be 10%. Compared to 1% in 1912, before the institution of the general income tax.

A factor of 10.

Even with 2.5 trillion in income tax revenue, we're still talking a scale of tariffs that is an order of magnitude more severe.

We've never seen tariffs at the level Trump has proposed. The last time we tried anything remotely resembling them was 1930. And the great depression immediately followed.

Our economy would enjoy fantastic growth if the income tax were eliminated.

 

[excalibur]

Income tax was authorized by the 16th amendment. It would take another constitutional amendment to remove it.

But, Congress then had to enact the IRC, and Congress can abolish the IRC while the Amendment remains (hopefully to be repealed afterward).

 

[Skylar]

Our economy would enjoy fantastic growth if the income tax were eliminated.

41 million jobs are tied to trade. That's almost 1 in 3 full time jobs.

Tariffs at the scale of 10% of the GDP would devastate import markets, cause massive inflation, and provoke retalation that would severely damage our export markets. Costing millions of American jobs.

How would this be beneficial to the economy?

And of course, you never addressed ANY of the downward spiral of revenue caused when the 85% tariff would reduce the import market. Nor the increases necessary in tariffs on the reduced import market in order to maintain revenue. Or the retaliatory tariffs that would escalate as our tariffs escalated. Or the inflation that a sudden increase in price by nearly double of EVERY import.

Every drop of oil we import. Every imported avocado, iphone, piece of clothing, scrap of cobalt, big screen TV, car, truck or power tool. Every single thing we import.

Ignoring them doesn't make them disappear. Just as ignoring the last time we tried anything close to this in the 1930s immediately being followed by the Great Depression doesn't make it disappear either.

 

[CrazyTrader55]

Maybe we ought to, you know, cut government spending instead.

 

[Skylar]

Maybe we ought to, you know, cut government spending instead.

Trump was the single term record holder for the most added to the national debt in US History. He's not cutting shit.

Trump built his empire on leveraging massive debt. Why would he change tactics now?

 

[CrazyTrader55]

Trumnp was the single term record holder for the most added to the national debt in US History. He's not cutting shit.

Trump built his empire on leveraging massive debt. Why would he change tactics now?

Get your TDS under control. I didn't say Trump should cut spending. I said the GOVERNMENT itself, whether a R or a D is running things (same damn thing anyway), should stop spending so much money.

 

[Skylar]

Get your TDS under control. I didn't say Trump should cut spending. I said the GOVERNMENT itself, whether a R or a D is running things (same damn thing anyway), should stop spending so much money.

'Derangement', huh? Care to point out any inaccuracy in anything I said?

Of course not. I was spot on. You won't see the kind of government spending cuts you're calling for under Trump. Trump held the single term record for the most added to the national debt in US history. Trump has build his career on leveraging massive debt loads.

You'll get more of the same in a second term.

 

[CrazyTrader55]

'Derangement', huh? Care to point out any inaccuracy in anything I said?

Of course not. I was spot on. You won't see the kind of government spending cuts you're calling for under Trump. Trump held the single term record for the most added to the national debt in US history. Trump has build his career on leveraging massive debt loads.

You'll get more of the same in a second term.

I'm going to speak slowly. My post did not reference Trump or his tariff plan (which I think is stupid anyway).

I said that the government needs to spend less money.

What part of this do you not understand?

 

[Skylar]

I'm going to speak slowly. My post did not reference Trump or his tariff plan (which I think is stupid anyway).

I said that the government need to spend less money.

What part of this do you not understand?

And I'll speak just as plainly.

You. Won't. See. These. Cuts. Under. Trump.

Trump has called for massive reductions in the fed funds rate and more cheap debt. You'll see more of what you saw in his first term: massive increases to the national debt. Increases to government spending.

Were you able to follow this time? If not, can you highlight the words that confused you. And I'll hold your hand walk you through them. Because 'derangement' clearly didn't mean what you thought it did, either.

 

[WinterBorn]

Maybe we ought to, you know, cut government spending instead.

That is an excellent idea. However, I think we have established that our elected officials are incapable of do that.

 

[rampart]

This is essentially the Smoot-Hawley Tariff act all over again. It doesn't work because other nations retaliate. They put tarriffs on our goods, while maintaining trade agreements with each other. They flourish in a free trade environment among each other while we languish in relative economic isolation with the international market for our goods damaged or even eliminated.

We've tried this already. It was a disaster.

under trump the usa becomes north korea. isolated and backwards.

 

[22lcidw]

This is essentially the Smoot-Hawley Tariff act all over again. It doesn't work because other nations retaliate. They put tarriffs on our goods, while maintaining trade agreements with each other. They flourish in a free trade environment among each other while we languish in relative economic isolation with the international market for our goods damaged or even eliminated.

We've tried this already. It was a disaster.

The Federal Reserve caused the Great Depression. And making near everything within the borders of the United States greatly enriched us.

 

[pknopp]

Its not my opinion that should concern you. Its the history of this scale of tariffs and how catastrophically bad the outcome was. Again, look up the Smoot-Hawley Tariff Act of 1930 and see what followed.

This would be FAR worse as our economy is much, much more integrated into the world economy that the US was in 1930. With nearly a THIRD of US jobs tied to trade. Or roughly 1/3 or our full-time workforce.

The problem with tariffs is always the same: other nations can levy them too. And they do.

As a country we seem to like to repeat our mistakes over and over and over again.

 

[j-mac]

I am not thrilled with his either, but at least it isn't going to put the farmers back on the public dole to the extent Donny's did. From what being tapped, I don't think the average consumer will see it, that much either, except for electric cars. It may sound crazy if you are a city person or green energy nut, but I don't give a damn about electric cars and not likely to buy one at any price. At my age, I can live out my life without being forced into one.

Yeah, but you just can’t outrun stupid, can you?

 

[j-mac]

As a country we seem to like to repeat our mistakes over and over and over again.

True, we should have killed liberalism in the crib.

 

[citygator]

The 1,000,577th bad idea from Donald Trump

1. Nuking Hurricanes
2. Putting flashlights inside the body
3. Using disinfectant to kill virus inside the body
4. Buying Greenland
5. Thought covid would go away by the summer
6. Sexually assaulting a woman
7. Committing fraud to hide election interference
..........1,000,577. Suggested raising all our income from tariffs

 

[j-mac]

The 1,000,577th bad idea from Donald Trump

1. Nuking Hurricanes
2. Putting flashlights inside the body
3. Using disinfectant to kill virus inside the body
4. Buying Greenland
5. Thought covid would go away by the summer
6. Sexually assaulting a woman
7. Committing fraud to hide election interference
..........1,000,577. Suggested raising all our income from tariffs

Who ties your shoes for you?