Tariffs are Loaded with Unreported Benefits

A properly applied tariff is loaded with benefits. First, a tariff is both a flat tax and, as consumption tax, like the Fair Tax, tariffs lead to employment and higher wages. These, in turn, reduce the safety-net burden on other taxpayers while increasing tax revenue from all other tax structures.

The tariff is, first of all, a consumption tax, and as Fair Tax proponent Mike Huckabee notes, even the drug dealers pay this tax.

Secondly, a tariff is a flat tax, and, as a flat tax, it is simple and direct. None of the benefits of a tariff are diverted to an insidious, invasive, and pervasive bureaucracy such as the IRS. Furthermore, flat taxes are known to be the most just forms of taxation. Paradoxically, the flatter the tax, the more progressive it is. That is, the rich pay more of the total percentage of a tax when the tax is flat.

A properly applied tariff is a superior form of taxation. The founding fathers knew this when they made the tariff the sole tax available to the young republic. For more than one hundred years, by the tariff alone, America grew economically until the United States was the premier economic force of the twentieth century.

However, a properly applied tariff has tax benefits in modern America beyond its nature. The 2018 story of United States Steel is a case in point. In March it announced that it would call back 500 employees to work at its Granite City Illinois plant. This is it did in direct response to President Trump’s announced tariffs on imported steel.

“Our Granite City Works facility and employees, as well as the surrounding community, have suffered too long from the unending waves of unfairly traded steel products that have flooded U.S. markets,” U.S. Steel President and Chief Executive Officer David B. Burritt said in a statement released Wednesday.

Obviously, a second embedded tax benefit results from a classically employed tariff: the newly employed steel workers in Indiana will no longer be a safety-net burden on other tax payers. They will no longer be on the brink of seeking food stamps, subsidized housing, or receiving tax refunds based on low income tax credits.

Equally apparent to everyone but bought and paid for politicians is that the effective use of the tariff increases tax revenue via the income tax. The Indiana steel workers will earn more income and, hence, pay more income taxes.

The tariff is a superior form of taxation and, while it should be judiciously, it is to be preferred over all other forms of taxation in the United States of America. Tariffs should be abandoned only for the best international trade agreements, agreements we haven’t seen since, well, the institution of the income tax and the rise of the Federal Reserve Bank.

Tax Language for the Totalitarian State

  • An Employee’s FICA deduction: This is a payroll tax.
  • Earned Income Tax Credit: This is a tax cut. Because FICA is a payroll tax, even those that pay no federal taxes “deserve a refund” of their FICA.
  • Tax Cut: Like military spending and infrastructure spending, this is a federal expenditure also. Therefore, a tax cut must be “paid for.” Every year, the OMB fails in its duties by not calculating the federal expense involved in not levying a 100% tax on every man woman and child.
  • The Rich: Anyone who earns more than a household where both parents are teachers. Axiomatic: All the rich are involved in legalized criminality. They are purveyors of market extortion, wage slavery, or deliberate deception of consumers.
  • The Poor: These are the oppressed victims of the rich. These unwashed masses are often deceived by the malicious agents of capitalism into supporting fiscal conservatives. These people would unionize if they only understood what it meant to be poor.
  • Economic Stimulus: This is spending, preferably deficit spending. That’s why, no matter what the employment rates show, the Obama trillion dollar deficit spending package MUST have stimulated the economy. If it didn’t, it was only because we didn’t spend enough. Hence, the poor ought to receive all the tax cuts and the rich none.
  • Reaganomics: This was voodoo economics: the focus of all evil in the modern world.
  • Bush Era Tax Cuts: This is irresponsibility. These vicious tax cuts caused the oil price spikes of 2007, the real estate market collapse, and the ensuing meltdown of the global financial system.
  • Kennedy Tax Cuts: Kennedy only cut taxes because such cuts would result in Keynesian deficit spending. Deficit spending is always good. That is why Obama is the beloved one.
  • Coolidge-Harding Tax cuts: These NEVER happened. The 1920’s were evil. That’s all you need to know. There were gangsters and there were greedy people, and it all ended in the Great Depression. That is all you will EVER need to know.

As it is a serious rhetorical mistake to use the word “capitalism” when discussing the natural rights of a free people to prosper and to own property, so also it is a serious error to talk about tax policy and allow any of the above to be so defined. Here are the corrections:

  • An Employee’s FICA deductions: While it is true that the employer’s FICA contributions are taxes, the employee’s deductions are contributions to retirement insurance programs. No matter how likely it is that the federal government will renege on its legal obligation to repay with interest, the contributions made to these insurance plans, they are still, legally, employee contributions.
  • Earned Income Tax Credit: When this results in a net payment from the government to a citizen, this is a welfare payment. It may also be defined as disguised subsidy for businesses that provide insufficient wages for labor. This is a blatant redistribution of wealth. While, Reagan and others might argue that paying lower wage workers a small subsidy ultimately saves the genuine tax payers money that might be spend on unemployment, food stamps or other benefits to those that do no work at all, the Earned Income Tax Credit is NOT a tax cut. Hence, unlike any genuine tax cut, these federal distributions of other people’s wealth may be scored by the OMB.
  • Tax Cut: No tax cut is a federal expenditure. Money not taxed does not belong to the government. Hence, it cannot be spent. History is illustrative of the absurdity of trying to have an accounting scheme that accounts for what one does not have. Virtually every projection of revenue increase through increased taxes or of revenue loss for decreased taxes fail, and their failure are cascading ironies. Almost always, revenues, after tax increases, decrease. Revenues, after tax reductions, increase. Additionally, rates meant to target the rich tend to cause the poor to pay more of the overal tax burden. Likewise, evening the rates between the top bracket and the lower brackets tends to result in the rich paying more. It is like God is laughing at us.
  • The Rich:  While, this usually means the top wage-earners, “rich” has become a slur. All the “rich” are hateful, but, when asked, most folks consider those who are “rich” to be those who are only slightly wealthier than they are themselves. Who is to say who is really rich? The riches of abundance in an agricultural society may not involve a great need for the American dollar. Certainly, unless they’ve inherited a rent control penthouse, a family living in Manhattan making $250,000 per year is not rich. They are barely in the upper middle class. The use of “rich” instead of ‘top income earners’ is NOT to promote class warfare; it is used for the purpose of promoting the totalitarian ideal of egalitarianism. Anyone who has anything more than their neighbor is one of the deplorable “rich,” Heck, admit it, you know you yourself hate that fellow down the street. Yea, that one. Still, resist the temptation, for someone down the street hates you too.
  • The Poor: In terms of taxation, these are the lowest income earners. As it is impossible to know who among us are “rich,” except on a case by case basis, it is just as hard to know who the poor are. Why are some people indigent? Is a student working part-time, living in his parents’ house, driving his grandparents’ spare Prius, and being supported by a college grant one of the “poor”? Are there people who, even in a robust economy, would choose to work part-time while pursuing their passion for surfing? What of those who have sacrificed their considerable abilities to become the slaves of narcotics?
  • Economic Stimulus: Since every measurable increase in economic growth is, by definition, taxable, an economic stimulus is one that increases government revenue while decreasing government expenditure. This is called a tax cut. Actually, it is called enlightened tax policy. There is a place between no taxes and no government and totalitarianism where the maximum amount of revenue is collected. However, this number is affected by a number of other government policy vectors. Reducing government while reforming regulation, equality in tax rates, protection of the rights of property, prosecution of governmental corruption, transparency in laws and in government operation all form a nexus around correct tax policy.
  • The Kennedy Tax Cuts: While often defended by the totalitarian democrats of egalitarianism as an effort to employ Keynesian economics, these tax cuts served as a model taken up by Milton Friedman and Ronald Reagan. They were so effective that the Democrats couldn’t stand them. They were ended within four years by Lyndon Johnson.
  • Reganomics: The tax cuts of the 1980’s that resulted in the top income earners paying more of the tax burden than the lowest income earners. These tax cuts doubled federal revenues, ended inflation, and spurred growth at twice the rates of Johnsons’ great society.
  • The Bush Era Tax Cuts: This series of three tax cuts ultimately came close to equaling reduction in rates provided in the Reagan era. The third of these tax cuts was the first failed stimulus package of the American twenty-first century. It relied too heavily on income redistribution policies of increased standardized deductions and tax credits for children. The “simulative” effects went, primarily, to Saudi Arabia. Although it is difficult to disaggregate the data, like the Reagan tax cuts, the first two rate cuts for the top wage earners resulted in the lowest income earners paying less in taxes.
  • Coleridge-Harding tax cuts: These are the purest tax cuts in the last one hundred years. Unlike the Reagan and Bush tax cuts, these were largely simple rate reductions. They did not involve income tax credits, or increased standard deductions. The resulting prosperity in America is still almost beyond description. If it had not been for the prosperity of this age, America may not have survived World War II. This information is NOT difficult to disaggregate. After evening the tax rates, the lowest income earners CLEARLY paid less in taxes than they had under the rates that had previously targeted the top income earners.

Those Earning $400,000 a Year aren’t Marx’s Rich

The president of the Chicago teachers’ union’s comments about beheading the rich, when taken with Obama’s desire to de-capitalize those making $400,000, shows a misunderstanding of the French Revolution and its importance to Marxist doctrine about the rich. In America, by Marx’s own standards, those making $400,000 a year are not the rich, evil, bourgeoisie.

guillotine3[1]Bourgeoisie is a term for a social class during the French Revolution that eventually became the enemy of every good Communist. Marx claimed that the bourgeoisie of the French revolution, the talented, but far from rich members of the French 3rd estate, evolved through industrialization into the evil, crony-capitalist, monopolistic, ruling rich that workers (the proletariat) must destroy. Marx’s post-industrial evil bourgeoisie had a single distinguishing characteristic: they owned the means of production.

Of course, today, most free market types recognize that any monopoly is counter productive, but Marx had a far better solution than deregulation. His was much like Karen Lewis’ “off with their heads!” Karen should be warned though, after the French Revolutionary ruling committee, the one with Orwellian name: the Committee of Public Safety, was done beheading the members of the French 1st and 2nd estates, they went after everyone else for almost anything else. They were sort of prototypes for Mau Tse-Tung and Joseph Stalin.

Dear Marxists everywhere, this is not a coincidence. Whether you read Edmund Burke or Friedrich von Hayek, the reality is this: the rights of property protect us all. To unmake the foundational relationship between a law-abiding man’s work and his earnings destroys the fabric of law, and leaves only lawless tyranny. But I digress. Back to whom Karen Davis and Obama ought to be beheading according to the purist Marxist doctrine.

Karen ought to be beheading those who own the means of production, for they are Marx’s evil rich. They are the French 1st and 2nd estate. They are also, as Karen sort of alluded to when she said:  “… there is one party in this country – that is, the party of money, with two branches…” By this she seems to mean that today’s political elite are the modern bourgeoisie. In this she was talking Marxist doctrine, for the French 2nd estate were those who were exempt from the taxes and the rules the rest of France had to live by. Today these are elected officials, judicial appointees, lobbyists and all the political bureaucrats currently eating us out of house and home.

Karen, though, like far too many modern American Marxists, in the spirit of the Reign of Terror, has redefined the bourgeoisie, the “rich” in search of more victims for the tax guillotine.  Karen and Obama need to review American class structure, not according to yearly salary, but according to the characteristics described by Marx.


There are two leisure classes in modern America, the lower class and the upper class. Both classes exert tremendous control over the means of production. The entire working class is the middle class.

The American middle class itself can be broken down into the Upper-Middle Class, Middle Class, and the Lower-Middle Class. Daumier BourgeoisAmerica’s upper middle class are the skilled artisans and traders of the Middle Ages. These are not the land holders of medieval society, nor are they the bourgeoisie of the industrial society that spawned Marx’s analysis.

The American lower-middle class are unskilled workers who, in many ways, are similar to the Marxist proletariat. Unlike a true proletariat, the American lower-middle class worker can develop marketable skills. Some will and some won’t.

The core of the American middle class are the semi-skilled or highly educated class. This class is dependent on institutional structures for their social status. Not everyone can succeed in America’s bureaucracies, but most can. This group is exemplified by policemen, teachers, military officers, college professors, and tax collectors. These are not the pure capitalists of Marxist ideology, for they don’t control the means of production and, independently, they produce nothing of value. Members of the modern Committee of Public Safety, often found in our institutions of higher learning, want to call these middle class Americans the upper-middle class. This is for two reasons: first, it makes intellectuals feel better to call themselves the upper-middle class, and, secondly, this allows the political class to argue that all evil comes from doctors, lawyers, and pizza franchise owners. Conveniently, this allows both of these subgroups of the middle class to avoid responsibility for their own monumental failures. But when the characteristics of each class are considered, it is plain that, in America, $400,000 a year makes you part of the working upper-middle class.

America’s upper-middle class are skilled workers. This class is exemplified by doctors, certain kinds of engineers, computer programmers, and those capable of sophisticated repair work. Likewise, lawyers, and those skilled in business investment or organization are members of this class. These individuals can prosper without the help of a bureaucratic organization or a union. This financially mobile upper-middle class produces services that are independently valuable. In America, these upper middle class members do not control the means of production; they are the means of production.

Doctors are the CEO’s of their small businesses because they produce the essential services first hand. Even the investors and entrepreneurs at this level often invest borrowed money. Part of their skill involves presenting and selling business plans to those who do own the means of production. Like the doctor, their ability to recognize value and market share means they quarterback a team of workers that, together, produce value.

America’s upper middle class are the skilled artisans and traders of the Middle Ages. These are not the land holders of medieval society, nor are they the bourgeoisie of the industrial society that spawned Marx’s analysis. Even though some of these may break the $400,000 per year mark, they are not the classic Marxist bourgeoisie.

Within this group are also those in the entertainment business such as actors and professional athletes. These later groups, like salesmen, may produce income in short, intense bursts. To be properly understood within the American cartelclass structure, an athlete’s or an entertainer’s yearly income should be amortized over the lifespan of the earner.

The bourgeoisie, those of inherited leisure who control the means of production in America are not those who gain status within the bureaucracy of the banks, they are the bankers we don’t see. Likewise, the leisure class are not those who are working their way up in a Wall Street firm, those of inherited leisure are the massive invisible, individual investors. While Americans who live by interest on their bonds and the dividends of their stock are the leisure upper class, the true haute bourgeoisie, those who hold the means of all production in the industrialized West, are those who provide fossil fuels.

The failure to truly explain class structure in America using Marxist language, has allowed the word “rich” to be demagogued. For instance, while statistics become susceptible to great error when taxable income is the question, it does seem that in any one year, those who make more than $400,000 can’t be greater than 4 or 5 % of the population. But it is a often a different 4 or 5 % every year. The years an American breaks $400,000 are often the years of his “bumper crop.” These are the best years of the entrepreneur’s life. From these years of peak salary and production, an upper-middle class member lays the basis for buying the means of production back from China or Saudi Arabia. To tax the upper middle class of America is to practice the Bush doctrine of preemption, not on terrorists, but on “the rich.”

moneyObama and Lewis must remember that Marx lumps the teachers and the business owners together as the petite bourgeoisie. Unless these two want Fascism, as good Marxists they must support the unity of these to strata of society against the truly evil rich, the 1st and 2nd estates in the French Revolution and the haute bourgeoisie of industrialization.

Ironically, the French thought they were America. At first, the French were applauded by the English liberals for their glorious rout of tyranny; ultimately, as the Reign of Terror ignited, even the best liberals were utterly disillusioned. From the beginning, however, the French Revolution was condemned by Edmund Burke. The strength of Burke’s conservatism was his ability to distinguish the failed elements of the French Revolution from the tyrant shaking ideals of America.

If Liberals want to be disillusioned, they will ignore this Marxist analysis of American class structure and charge forward, taxing everyone that has more money than the leisure lower class. Ultimately, we could all end up not only a proletariat from Marx’s demented dreams, but a starving serfdom in a medieval fiefdom.