Exploring the Economic Impacts of Tariffs vs. Income Tax

I moderated a ZeroHedge debate between PhD economists and commentators Noah Smith and Peter St Onge on President Trump’s proposal to replace income taxes with tariffs to fund the federal government. As they unpack the economic theories behind these two tax systems, they also analyze the political dynamics involved, the moral justifications for our current spending, and the nature of government itself. Noah is a former professor at Stony Brook University with a popular Substack, “Noahpinion”, and Peter is a former Fellow at the Heritage Foundation who publishes daily economics videos on X (Twitter) and YouTube.

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Read Noah’s Substack: https://www.noahpinion.blog/

Follow Noah on X (Twitter): https://x.com/Noahpinion

Watch Peter on YouTube: https://www.youtube.com/@Profstonge

Follow Peter on X (Twitter): https://x.com/profstonge

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Outline:

[0:00] Intro

[0:53] Meet the debaters

[3:44] The case for tariffs

[6:10] The case for income tax

[13:02] The politics of taxation

[26:20] Effects of the Trump tax cuts

[31:09] Trade deficits and budget deficits

[38:35] Where did the economic growth go?

[49:57] The economic effects of birth rates

[52:50] Can we separate the tax and budget debates?

[55:38] How progressive is our tax system?

[1:05:38] What’s the ideal tax system?

[1:10:29] How should government spend our money?

[1:21:49] Redistribution, democracy, and the Constitution

[1:37:56] The welfare state always grows

[1:41:57] Has government made our society better?

[1:47:11] We can’t theorize our way to utopia

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Watch the video version on YouTube: https://youtu.be/nkYwO0FlJW4

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