“Where do we have tariffs?” President Trump asked on October 25, 2018.
One obvious answer is on imported clothing and footwear, where tariffs are both substantial and hit low-income consumers hard.
The United States raised $33.1 billion in tariff revenue in 2017, but $14 billion of that came from tariffs on apparel and footwear alone. These items account for 4.6 percent of the value of U.S. imports, but 42 percent of duties paid. That means while the average effective tariff rate for U.S. imports overall is just over 1.4 percent, rates for apparel and footwear are 13.7 percent and 11.3 percent, respectively.
On a day when an editorial in the venerable Chicago Tribune newspaper is making national news for pleading with Illinois lawmakers to clean up the state’s fiscal mess, it’s a good time for Florida to count its blessings.
. . .
Right now, on the basis of its solvency in five separate categories, Florida ranks 4th among U.S. states for fiscal health, behind only Nebraska, South Dakota and Tennessee.
. . .
Illinois, on the other hand, ranks 50th — dead last and apparently in real trouble.
To be sure, fiscal policy at the state level is only one measure of economic health. Economic regulations, personal safety, rights also matter. Local government activity has an impact as well. Several localities raised taxes to pay for increased teacher pay and more police. Unfortunately, higher pay does not equate higher student competency.
It is scary that a far-left candidate for governor lost his race by a few thousand votes out of millions cast. Even with a GOP legislature, the governor controls a vast bureaucracy with which to implement policy.
One thing on the docket is for state-level elected officials need to write the regulations on marijuana legalization.
Why? They can no longer on their tax bill deduct state and local taxes and other perks from their sport. Well, those deductions were subsidies from other taxpayers. And that makes the tax code fairer and flatter and less distortionary.
Anyone who supports those tax deductions is defending regressive taxes.
Whole thing here.
Following up on my post yesterday about France being the top taxed country in the OECD (Organization for Economic Cooperation and Development), the ever resourceful fiscal economist Dan Mitchell dives deeper into the data, including a table that compares the taxes AND spending as a percentage of GDP.
The US ranks in the lower percentages than most countries on both scales. Lower means lower tax and spending levels as a percentage of GDP. This is a positive development in my book because the government wastes a lot of resources and is less efficient. Dan also explains that. How does a government provide necessary services efficiently and effectively but keeps the politics and feeding of bureaucracy?
WSJ via Stephen Green:
The Organization for Economic Cooperation and Development’s annual review of taxes in its 36 members published on Wednesday showed the French government’s tax revenues were the equivalent of 46.2% of economic output, up from 45.5% in 2016 and 43.4% in 2000. The Danish government’s tax take, which was the highest among OECD members between 2002 and 2016, fell to 46% of gross domestic product from 46.2% in the previous year and 46.9% in 2000.
The U.S. government’s tax revenues also rose relative to the size of the economy as a result of a one-off tax on accumulated profits earned by American businesses overseas. But at 27.1% of GDP, only five countries had a lower tax take: Mexico, Turkey, Chile, South Korea and Ireland.
This is misleading. Taxes may be lower but the real burden is government spending because the spending must be paid for out of taxes eventually. So if tax rates are low but budget deficits continue, that excess spending must be paid for in the future. What good is that? It helps politicians now because they don’t have to raise taxes now or cut spending now. Its still socialism.
….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN
Tariffs are a tax paid by Americans on stuff they buy overseas, not the foreigners who are selling the stuff.
According to the President, the federal government is “taking in $billions”, but only because Americans are paying the tax. This is a total backfire on the Administration’s part.
As bad, there is no “raid”. The buying and selling is voluntary. Americans are deciding to buy from overseas. That is not a raid on the wealth of a nation.
UPDATE: Dan Mitchell weighs in.
The French government caved in after Paris’ worst rioting in decades and delayed an increase in energy taxes Tuesday — but it was seen as “too little, too late” by many protesters whose anger seems increasingly focused on embattled President Emmanuel Macron.
The grievances widen:
The protests began Nov. 17 with motorists upset over the fuel tax increase, but have grown to encompass a range of complaints — the stagnant economy, social injustice and France’ tax system, one of the highest in Europe — and some now call for the government to resign. . . .
One unifying complaint among the leaderless protesters, who come from across the political and social spectrum, has been the anger at Macron and the perceived elitism of France’s aloof ruling class.
Me: taxes are the most visible expression of government control by greedy politicians and bureaucrats. But these same people are playing a con game. They convince the general population into thinking they are helping you by taxing and regulating some trumped up, anonymous, evil person or corporation. But, those same taxes and regulations come back to bite you because those regulations and taxes trickle down to you in the form of reduced choices and higher prices. This time, the French people caught on. But remember, regulations work the same way but are less visible, so don’t sign up for that. And, a tax on one is a tax on all.
Read it all.