Debunking Economics - the podcast Will Trump drive us to a better tax system?
Mar 26, 2025
The podcast dives into the intricacies of value-added taxes (VAT) and the potential repercussions of proposed U.S. tariffs. It questions the fairness of VAT in international trade and explores whether eliminating it could simplify taxation. The discussion humorously contrasts transaction taxes with VAT, highlighting their effects on consumers and government revenues. Insights into Trump's economic strategies reveal the challenges of achieving tax fairness, particularly for low- and middle-income earners. Get ready for a thought-provoking look at taxation's future!
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Trump's Tariff Rationale
- Trump's tariffs target countries with VAT or GST, viewing them as unfair taxes on American imports.
- However, these taxes apply equally to all goods sold within those countries.
Historical Misunderstanding
- Trump's tariffs might stem from a misunderstanding of how import duties functioned in the 19th century.
- He seems to believe that tariffs are paid by the exporting nation, as they were when governments were smaller.
Tariff Inflation
- Tariffs are inflationary as importers pass on costs to consumers or domestic producers raise prices in response.
- The actual price increase depends on market dynamics and companies' pricing strategies.