At least that’s what seems to be the case of this writing, though it’s quite possible that the the President will further back down under condemnation of business leaders or the precipitatous drop in the stock in the market. Certainly liberals, never ones to be particularly concerned about low taxes or being business friendly are suddendly very worried an obstacle to trade be levied.
Tarrifs are taxes. It’s actually, in the Europe they much more frequently use the word tarrifs to describe taxes then we do in America. In the case of tarrifs on imported goods, they are a corporate tax, paid for by a corporation, namely the importer. Liberals, suddenly very concerned about the inflationary impact of new taxes, say don’t you know consumers are going to pay more for goods at the store, and that’s going to fuel inflation.
Yes and no! Do businesses past the cost of taxes and complying with regulations to consumers? Certainly to an extent, maybe to a large extent or maybe to smaller extent, depending on how competitive a market is and how willing corporations are to eat some of their profits to stay competitive. Corporations are devilishly smart, they know where there are opportunities to avoid paying taxes and pocket increased profits, they’ll find way to do it.
Taxes can drive people and corporations to make better choices. Government can incentivize good behavior in many forms, and one of those ways is to make sure doing the right thing is cheaper. I long been a believer in high carbon taxes, particularly a steep tax on the extraction of coal, oil, natural gas and other fossil fuels. I’ve thought a $250 a ton carbon tax levied on fossil fuel producers is entirely reasonable, as is electricity that costs $1 or $2 a kilowatt hour, and gasoline that is $10 or $15 a gallon.
People say I’m anti-poor people, and that such policy would be incredibly inflationary. But it would be so good both for the environment and people as a whole – the era of 40,000 plus people dying on the highway each year would drop precipitously as would deaths from cancer and obesity-related diseases as people would be doing a lot more walking if motoring was no longer so damn cheap! If people weren’t so damn fat, eating such crap and motoring everywhere, there would be so much less human suffering.
Liberals have often pitched carbon taxes in the concept of cap and trade or cap and dividend. The argument is that you’ll pay more in taxes and then you’ll get back a big check from the government to help in part cover the cost of higher energy costs. This is not unlike the concept that Trump is proposing, with import duties paid by importers and corporations being used to fund extending and possibly expanding tax cuts. Maybe it’s better to pay more up front to discourage bad behavior – namely cheaply importing goods from countries with terrible environmental and labor records – and get it back in lower income and dividend taxes later on. Moreover, if higher taxes encourage people to invest more and buy less stuff, it’s better for people’s economic well-being and the environment.
Liberals also note, much like Trump saying tarrifs are on importers and corporations not consumers, that carbon taxes are on fossil fuel producers, and there is no guarantee that all costs will be passed on to consumers in higher fossil energy prices. And even if fossil energy prices go up, consumers will be incentivize to burn less carbon, by choosing not to drive, using more efficient cars and electric automobiles, insulating their buildings and adding heat pumps to their homes. People will live closer to work, eat a less-carbon intensive, healthier diet and generally be less polluting. Not instantly – carbon taxes involve a lot of pain – but it won’t just be consumers that are suffering the pain.
I generally support taxes on consumption and elimination on taxes on investment. Which is why I believe strongly both in tarrifs and carbon taxes. Or for that matter on taxes on alcohol, cigarettes and marijuana. Not that I’d don’t enjoy an occasional beer in the woods, while enjoying a Marlboro Red and some cannabis, laughing my head off to the Grateful Dead’s Dire Wolf. But taxes should incentivize good behavior, which means saving and investing for a better tomorrow, rather then a policy that encoruages getting stoned and drunk every day as you trash your lungs and liver. Life might get more expensive at the gas pump for your big jacked up truck and Walmart but those aren’t things we should be encouraging, even if I do like my truck and smoking pot. But not every day.
Everybody knows I love Trump, and that I even voted for that assine asshole. Drill, baby, drill is fucking stupid as climate is melting down around us and our cities are getting surrounded by ever larger garbage heaps of PFAS, asbestos, plastic, and all kinds non-renewable resources heaped up as waste. That said, I’m not that opposed to how Trump is shaking everything up, as things have been broken in America for too long, and the conventional wisdom has dominated politics for too long, even when their is substantial evidence to contrary.
One of them is that all costs of taxes and regulations are passed on to consumers, or that energy sipping appliances and vehicles that cost more don’t necessarily save consumers more money then they cost up front. Trump is a fool for repealing energy standards, even if it’s true we should always be evaluating them to ensure they are actually delivering promised benefits at a reasonable cost.
The evidence is clear – regulation and taxes doesn’t just cost – they can also save people money and produce better behavior in society.