Site icon Miles Copeland, III

Taxes

Politicians in favor of Universal Health Care have stated that if your taxes go up to pay for the health care are less than the cost one is paying for insurance (and one no longer needs to pay those high insurance rates) then the net effect is a decrease in an individual’s annual expenses. In other words: one hand gives – the other hand takes away. The question politically is: is there a difference in cost to the individual?

Trump has done the same thing regarding taxes.  He has lowered tax rates (though it is argued most of the benefits go to the rich) BUT at the same time he has levied tariffs on goods imported into the US.  Those tariffs are paid by the US consumer so in effect are a new tax.  Trump says over and over that those tariffs are paid by China or whoever but that is not what tariffs are.   The exporter does not pay, the importer (ie US companies and consumers) pay.  So tariffs are a tax in the US.

 As far as the government is concerned it does not matter if one lowers income tax and the reduction in revenue is offset by income from tariffs. The net effect is the same. Meanwhile, no matter who gets elected there will be no option but to raise taxes AND keep the tariffs. The government needs to find a way to recoup the huge payments re the virus which has ballooned the debt to levels never before imagined. There is also one other cost issue that is rarely mentioned.  Sure, eliminating and lowering regulation standards today will help make profits easier to make, and should result in more jobs today BUT might (and some say for sure) increase the costs of dealing with environmental impact in the future.  Fires, Hurricanes, Tornados, sea level rise all will cost huge amounts to deal with.  All are costs that are born by government so funding for the damage repair, prevention and the like has to come from somewhere. Clean air, water etc. are also issues that cost money to solve. So one hand decreasing todays costs will mean the other hand paying the costs in the future. The likelihood is that the future costs will dramatically outweigh the benefits of today.

For me, the biggest danger of the Donald Trump era is whatever benefit one can say we gain today; and there are some; seeds are planted that will lead to a world we don’t want to see tomorrow. Unfortunately Trump looks for “wins” today so he can look good TODAY. Tomorrow is not his problem. But it will be ours.

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