July 10, 2025: Lets Talk Tariffs

 There are so many issues to write about, and new ones crop up every day. Every time I think I can go back to a draft in my blog file, I wind up compelled to write something new instead. Today, tariffs are back in the news, so lets talk about tariffs.

Donald Trump has stated that the word “tariff” is the most beautiful word in the English language. But is it a good thing? The idea of a tariff is to make domestically produced goods more attractive by making cheaper imports closer in price, thereby balancing trade between nations. It sounds good until you start thinking about all the goods we buy in America that are manufactured overseas. We buy them for two reasons. First, imports enable us to stretch our budgets. Second, a good number of those goods are no longer manufactured in the United States. In our global economy, it is rare to find even simple goods that have all-American components. Parts come from everywhere. These two main issues, cost and availability, cannot be solved by arbitrarily taxing everything coming in from overseas.

There is another use for tariffs. They are a tax, plain and simple. It sounds like they are a tax paid by the foreign country sending us goods, but this is not what happens. That tax is paid by the American importer, then added to the price you and I pay. We pay the tax on the goods we buy. In this way, the Trump government collects a tax from every consumer that helps offset the tax cuts to the rich passed in the Big Beautiful Bill. It amounts to a replacement tax.

Everybody pays. But nobody gets to claim the extra tax on their income tax return. Unless you are a business. Tariffs are classified as a business expense, and deductible. The cost is both deducted and passed on to you by way of higher prices. Who is most affected? Most Americans now will be paying a hidden tax out of their income with no opportunity to claim a refund on their income tax returns. Any tax breaks from the “BBB” will be wiped out.

To offset the tax breaks to the rich, Trump plans to fill the state coffers with tariffs paid by all Americans. It's a con. It's a con with consequences that will spread world wide. As with cutting back international aid and discouraging green energy at home, Trump's tariffs create voids across the planet among our allies and friends. China will step in. Every deserted ally, every abandoned program, every insulted trade partner is an invitation to China to take over our former position. It makes you wonder just where Trump's alliances truly lie.

tax Rates Around The World

I did some simple math today, for S's and G's. Putting together personal income tax, social security, medicare, state income tax, and health care coverage, I discovered that about forty cents of every dollar I earned in 2010 went away before I ever saw it. I was fortunate in one respect -- as a postal employee my health care coverage was reasonable to the extreme. Now that I have retired, my health care costs skyrocketed to nearly 12 percent of my retirement income. In another way I was less fortunate: living in California I fell under one of the highest state income tax rates in the country at 11 percent. The point is, by the time everything was taken out, my tax and health rate ran to 40 percent.

I also looked at a tax rate graph including various countries. I was surprised to learn that the United States average income tax for individuals is 30 percent while corporations here pay much more at 40. In Holland, the place of my birth, the rates are reversed -- corporations at around 25%, individuals at 40-plus.

I state this to do a comparison of rates, with the underlying question being, how much do we GET for what we put in? Other places with higher tax rates provide more for their citizens on the spot. In America, it seems we are expected to work until we drop, and pay and pay and buy and buy, and not get sick until we hit 65 (or older) and mandatory MediCare steps in. They cover 80%. You still have to suppliment the other 20%, and at a high cost.

I read an article that flatly stated that baby boomers are finding they have to keep working into 70. I am not against working when your mind is active and your body is willing, I think it's good to work. But it was never the American Dream to keep working past retirement and until you drop dead at the job site. This is yet another change in a country and society that -- for all its entitlement programs and big spending through government programs -- gives back very little to its people.

Feel free to disagree. Then remember how much health care costs the individual, and how many exceptions there are to your coverage. And remember the last time you got five weeks paid vacation, or 8 months paid parental leave. Life is expensive everywhere in the "developed" nations. I have no direct experience as to how things work in other places, but I see a great deal of expensive waste in our country, and I hear not word one about HOW to make things better in all the promises our pilticians dispense like free cheeseburgers.