Do You Vote to Pay More Taxes?
Why many people are against tariffs.
I have friends who believe government is the answer no matter what the question is. In Washington State we have sales taxes, excise taxes, real estate taxes, permits, sin (liquor and tobacco) taxes, licenses, fees for nearly anything. We don’t have personal income taxes, although we do have a Business and Occupations (B&O) Tax on businesses. The B&O tax is on business revenue. A business can be losing money and still owe B&O tax.
So, why are people who rarely meet a tax they don’t like against tariffs? Simple. They might have to pay them.
That is one of the things I don’t like about how many people vote. I try to vote in a way that I think is fair. Is it fair to force others to pay for public good and not pay myself? I don’t think so.
The U.S. income tax system is progressive. People who make more money pay a higher percentage of their income in taxes. At least that is what the tax tables say. However, many deductibles and exemptions are given to encourage “public good”. The result is that the rich aren’t paying nearly what the tables say.
Some complain that the rich aren’t paying “their fair share”. What if we had a flat tax with no exemptions? How much would you be willing to pay?
We could have a flat tax with a large deductible that would be the same for everyone and still be progressive. That appeals to me, but I’m not sure of the details.
Now back to tariffs. Tariffs are being used as a tax, a bargaining tool for trade, and a negotiation tool for diplomacy. You can argue that you don’t like tariffs being used for trade or diplomacy, but what about the tax? We need tax revenue for public good.
The argument seems to be that tariffs are driving inflation. That would be true if consumers were paying the entire tax. So, the question is: Who is paying?
Here is an example, quoted from The New York Times:
“If Walmart imports $100 in shoes from Vietnam — which face a 20 percent tariff under the terms of a preliminary trade deal — Walmart will owe $20 in tariffs to the U.S. government.
What happens next?
Walmart could try to force the cost onto the Vietnamese shoe manufacturer by telling it that Walmart would pay less for the product.
Walmart could cut into its own profit margin and absorb the cost of the tariff.
Walmart could raise the price of the shoes at its stores.
Some combination of the above.”
According to the article, the foreign company could be paying the tariff. The importing company could be paying the tariff. The tariff could be passed on to consumers. Or a combination of the above.
So, why are some harping on consumers paying higher prices? Because they don’t want to pay the tax. There is a way to lower taxes for us all. Reduce government spending. If we are not willing to pay, what are we willing to axe? That is the question we are facing.
As for me, I’m fortunate to be able to pay a little more. I’ve talked with two people in the last couple of weeks who have said national politics really doesn’t affect their lives much.
How about you? Are rising prices affecting your purchases? Are you willing to pay a little more for a more stable U.S.A.?