It’s no secret that the lawmakers and administrations that cozy up to the billionaires and corporations promote reducing or removing the income and corporate taxes and replacing them with increased sales taxes. If one’s goal is to protect the financial interests of the wealthy at the expense of increased taxation on the working class and financially vulnerable section of the population, there are probably very few alternatives that could secure this goal more effectively than such changes in the tax laws. To appreciate this, consider the fact that the basic needs of different individuals are quite similar, regardless of their financial status. The need for food or clothing or personal effects does not drastically change based on one’s income. Granted, the rich and affluent spend more on these items, but not with the same proportions as their income differs with the working class. For example, an individual with a $30 million annual income earns about 1000 times more than a person earning minimum wage, but I doubt they would spend 1000 times more on every meal or every clothing item or every personal effect. As such, replacing income tax with sales tax would somewhat equalize the tax contributions of these two individuals in absolute dollar amounts, and not proportionately to their income, dramatically benefiting the wealthy and subsequently requiring increased tax obligations of the working class to make up for that.

Considering the above example and arguments, it is not surprising that such proposals for changing tax laws are not popular enough to receive sufficient explicit support in the congress or administrations from either party. So, here come the tariffs. Contrary to the dishonest and misleading claims of the incoming administration that tariffs are some kind of taxation on foreign nations, apparently as a punishment for not treating the United States fairly, and the bolstering of a new and shiny government entity called “External Revenue Services,” to further that claim as an evidence, tariffs are paid by the American importers; payments that will undoubtedly be compensated by markups on the prices of the imported goods. Assuming that these markups will be exactly equal to the amount of the tariffs paid by the importers, that means that the American consumers will eventually pay for those tariffs, in the form of some sort of sales tax. In practice, it is not too unlikely for such markups to be even larger than the amount of tariffs, to further increase the profits of the importers, with excuses such as additional administrative costs, etc. So, as you see, tariffs can be a very attractive alternative to the changes in the tax laws explained at the top of this post, and are guaranteed to hurt the working class and the financially vulnerable section of the population.

The notion of blanket tariffs on every imported product from every other country will prove to be even more absurd if one notes the fact that the main purpose of tariffs is usually to support domestic producers against lower prices of the similar imported products. But that clearly requires existence of such domestic producers for every product on which a tariffs is imposed. In the absence of such domestic producers that can replace the variety and volume of the all the imported products, blanket tariffs do not have much justification. Further considering the fact that most foreign nations are likely to impose retaliatory tariffs which will hurt the American exporters, one wonders whose interests will the incoming administration be trying to serve and protect through such blanket tariffs.