Trump has floated the idea of eliminating federal income tax completely, which would balance things out. I think I’d rather pay taxes in the form of tariffs than through income tax. The tariffs can help protect jobs from being outsourced, which has been a big issue over the last several decades. With everyone talking about out AI coming for our jobs, having more options for employment seems like a good thing.
I suppose the issue would be for those on the lower end of the earnings distribution, as they pay little to no federal income tax, but would be hit by a consumption tax. Though I do wonder if we could see wages increase when we don’t have to compete as much with low production costs in China.
US federal income tax raises vastly more revenue than tariffs ever have. Eliminating income tax would require tariffs at levels high enough to dramatically raise consumer prices and would certainly trigger retaliation.
Also, reduced competition from China does not imply higher wages unless labor has bargaining power and firms pass gains to workers. Historically it has been passed to shareholders not workers.
Finally, tariffs mainly protect manufacturing jobs. AI threatens white-collar and service work
As you pointed out in your comment. Trading income tax for tariffs is just shifting tax burden to the poor. Which the rich have been trying to do since the dawn of currency so at least the policy is consistent.
I suppose the issue would be for those on the lower end of the earnings distribution, as they pay little to no federal income tax, but would be hit by a consumption tax. Though I do wonder if we could see wages increase when we don’t have to compete as much with low production costs in China.