Monday, February 3, 2025

Tariffs Benefit the Tariffed Country

 "Tariffs raise government revenue by taxing domestic consumption of foreign goods and services. They should therefore permit reduction of other forms of domestic revenue raising ('income tax!').
 Their primary incentive effect is substitution in favor of domestic production."
 https://twitter.com/xenocosmography/status/1885965856120897941/


 Tariffs reduce local production, because the government suddenly wants to maximize imports of the tariffed good.

 Daycare is the State trying to ban motherhood, because mommy can't be taxed.

 Consider car [[insurance]].
 Consider obamacare. 

 Conquest's third law.

 Tariffs, like every tax, are crimes. Crimes cannot be prosocial by definition. They are parasitic by definition, and tariffs match the definition. Ideally, the State bans local production, forcing all of the good to be imported.

 Tariffs give clout to foreign industries. They form a special interest. Empirically or historically, we can see local producers will have a weak or missing lobbyist herd. A tariff on steel allows the foreign steel  interests to threaten your government's tax receipts by refusing to export.
 Meanwhile, if you threaten your government's tax receipts, they arrest you. Lmao. Apex kek.

 

 There's a constant: american tax receipts are 19% of GDP. Anything that might push them higher instead leads to tax evasion or collapse of the taxed industry. The part of the laffer curve where revenue is going down is the whole white economy contracting. 

 Maybe experiment with a 19% flat tax, see where exactly the 19% cutoff is. Then realize you're already over the laffer hill, and 18% of a larger economy is a larger absolute number than the 19%. Lowering taxes is far more important than trying to find the least-criminal crime.

 

 Tariffs raise foreign production. First, they consume it locally, so there's more raw stuff in the previously-exporting country. Second, exports can no longer supply much forex for imports, so they produce whatever they used to trade for. Transportation is cheap because it's subsidized, meaning they're saving deadweight costs there too. The raw prices are higher but you get lower inflation and higher wages.

 Canadians should be ecstatic about the 25% tariff. "Can't it be 40%? Come onnnn!"

 The effect of titanic canadian tariffs on milk is Communist milk. E.g. in canada, dairy was one of the primary vectors of the novel coronavirus, because the factories live up to the standards we can expect from Communism. Along with being a vector for non-novel coronaviruses... If the tariff is high enough that it's banning the import, then the result is catastrophic. Big crimes are big bad. Who knew. 


 Massive sanctions on Russia.
 Result: massive economic growth in Russia.


 The transportation subsidy has the same perverted dynamic as tariffs. Much of the reason it's so hard to find local goods is because the government wants to maximize transportation subsidies paid. To expand the bureaucracy. The more ridiculous and inefficient the supply line, the better. Hence trucks not trains, for example.

 Instead of subsidizing imports and then collecting duties on the imports, simply cut the subsidy.

2 comments:

Anonymous said...

Tariffs increased steel production in the US by 10% in 2018.

Alrenous said...

No they didn't.