His long, disjointed and tedious speech—all 108 minutes of it—was heavy on distraction and both real and imagined grievances and light on actual policy proposals.
But there was one idea that Trump floated during his rambling performance that was semi-serious.
He suggested that, if the tariffs he loves so much generate enough revenue, the U.S. government might be able to dispense with income taxes. He argued that his tariffs would force foreign countries and businesses to pay for American government services.
That’s a lie.
Foreigners don’t pay for U.S. tariffs. American consumers do.
We do.
Put simply, a tariff is a sales tax. It’s an added cost slapped onto a product made in another country to discourage Americans from buying that product.
There can be valid reasons for applying tariffs. Generally, wise American leaders have done so to protect infant U.S. industries from being driven under before they could develop the wherewithal to stand on their own.
One also could argue that prudent leadership would use them to protect certain native industries—such as steel or certain kinds of weapons manufacturing—that it would be necessary for the United States to have in time of war and that it would be difficult or impossible to build afresh.
But they never are shrewd or fair ways to raise revenue.
They’re not shrewd because they discourage consumption. So, if they’re successful, they actually work to choke off revenue.
And they’re not fair because—like all sales taxes—they’re regressive. They fall disproportionately on poor, working-class and lower middle-class Americans.
Demanding that a family with a household income of $40,000 pay an extra $2,000 over the course of a year for assorted foreign goods is much more of an imposition on them than asking a billionaire to cough up that two grand.
Income taxes, though, use different forms of moral and financial calculation.
Based on the reasoning that the billionaire who owns the factory has benefited more from the institutions of American society and the U.S. economy than the worker on that factory’s assembly line, income taxes are progressive taxes that generally seek to make that billionaire pay more proportionately than his or her employee, the assembly-line worker.
Billionaires—including the one currently occupying the Oval Office—always have hated the idea of progressive taxation. They argue that it’s not fair, fair, fair to ask them to sacrifice that desperately needed 10th luxury vacation home to pay for trivial things like good schools, safe roads or a strong military. In their eyes, it’s much more equitable to force the day laborer to choose between paying the rent or buying food for his or her family.
They want us to pity the poor billionaire.
Most people have figured out this scam when it comes to ordinary sales taxes. They’re smart enough to realize that a tax that costs the haves and the have-nots the same amount hits the have-nots harder than their more comfortable fellow citizens.
That’s why Trump works so hard to confuse people about tariffs.
He wants Americans to think that, somehow, he’s protecting them by forcing them to pay more for goods made in other countries.
In reality, though, he’s desperately searching for a way to shift the costs of the massive tax cut he and his fellow Republicans in Congress gave to billionaires.
Such as him.
The fact is that Donald Trump has done little or nothing to help the people who returned him to the White House, thinking that he would make their lives better. He hasn’t slowed inflation. He’s slowed job creation to a trickle. And he’s made it much, much harder for American businesses to sell their products in other countries.
But there’s at least one person he’s worked very, very hard—tirelessly even—to help.
Himself.
