Feb

3

Russ Roberts@EconTalker
Ninety seconds of economics. Shockingly clear and shockingly subtle.

Stefan Jovanovich comments:

This is the usual slight of hand by "free traders". Instead of discussing tariffs as a question of taxation, they always present it as a matter of personal liberty good vs. bad. Yet somehow that discussion never moves over to employment taxes; having the government take a quarter of everything even the lowest paid worker earns is not to be examinged as a matter of personal liberty.

The truth about tariffs as taxes is what Americans knew in the 19th century. If you want the revenue, the rate has to be low enough - 20% on average - that there is less pain in paying it than in smuggling or cheating. You cannot have quotas (funny how, in matters of employment taxes, we have them; no one is allowed to work for less than the minimum wage). Unlike employment taxes, tariffs take their money first from the wealthy; that was the Southern "way of life" complaint about them before and after the Civil War.


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