March 26, 2017

Tax foreigners to pay for American welfare

Now that "tax reform" is next on the legislative agenda, the first major overhaul since Reagan, it is necessary to remember that Trump did not campaign on being another "tax cuts for the rich" Republican. So while there may or may not be a tax cut for the rich, which would be nothing new, there will be some kind of tax on foreigners and foreign stuff.

The foreign tax could be on the goods and services in off-shored industries (a tariff), beefed up fees for applying for visas, taxing remittance payments made from within the US, a rise in income tax rates on legal immigrants, setting up an explicit tax to levy on foreign nations whose military defense we provide, and so on and so forth.

We hold the cards here because we are not an export economy, meaning retaliatory tariffs have few targets of ours to hit. Americans are less inclined to live and work in foreign countries, compared to vice versa. No Americans send remittances back here. Hardly any of us work abroad where our incomes could be taxed even higher than now. And nobody but Uncle Sam provides our military defense.

If the rest of the world is so much more dependent on us than the other way around, we can easily tax the hell out of them and they'll still profit by interacting with us.

Trump has mentioned this logic here and there, but never really spelled it out. In short, we do not need to raise taxes on ourselves in order to pay down the debt or spend on ourselves, such as welfare and other entitlement programs. It would be far more palatable to the American people if we paid for government goodies by levying charges of all kinds on non-Americans who need us far more than we need them.

This is how Trump plans to cut the Gordian knot of not-taxing and spending. We'll cut taxes on ourselves, and spend more on ourselves / pay down the debt, by charging foreigners out the ass to be a part of the American network.

An earlier post warned not to expect too much populism unless it also intersected with nationalism. It's still true that those are the most promising areas for change. The new system of "tax foreigners to pay for American welfare" is not a conceptual intersection between nationalism and populism, but at least a procedural one.

"But how are we going to afford President Trump's lifelong dream of a single-payer healthcare system?" Easy -- tax foreigners some more! Foreigners are not the root cause of our disastrous healthcare system, so it is not naturally an Us vs. Them issue. However if we can fix our healthcare mess by making Them pay up big-league for interacting with us, then that's enough of an intersection between nationalism and populism.

Seriously: expect that to be the answer to any furrowed-brow reporter asking Sean Spicer, Steve Bannon, or the God Emperor himself, "But how are we going to PAY for that?" Higher taxes on foreigners!


  1. Do you believe Trump understands fully yet the hardcore ideological mind as well as the impact of lobbying on the venal? He seems to now get the former, but I'm not so sure of the latter.
    Seems his legislation was a product of the latter, taken down mostly by the former, but Trump's populism just didn't seem really around. He's got Bannon there who definitely does know what's what, though... I'm a missing something? Why does it seem like Trump got taken? Why was Bannon making threats on behalf of this bill?
    I'm confident I'm missing something...

  2. Like I said recently, Trump is encouraging the GOP orthodoxy, both the corporate and libertarian / anarchist wings, both the ideologues and the empty suit vehicles for lobbyists, to hit him with their best shot.

    They come up with a bill that everybody hates, so there goes the Republican orthodoxy on healthcare -- now the only solution left is what Trump knows is the most fiscally responsible, and that's single-payer.

    He called out the lobbyists by saying that the Freedom Caucus lost with the help of Club for Growth and Heritage. AKA libertarian anarchist mega-donors and the think tanks they own.

    It's back to the Republican primary, where his main enemy is the hardline conservatives, Lyin' Ted, and their billionaire donors (Koch et al.).

  3. Per WSJ, Trump is courting Democrats to work on a bill for lower drug prices.

    If he is able to pull that off, he will then be in a position to work with populist Democrats to craft a new single-payer option as Obamacare implodes over the next few years.

    I find it astounding that many thought that the Freedom Caucus somehow emerged from this episode as heroes. To most of the country, they simply come off as obstructionists, representing an approach that only 20% of the country would willingly choose. That they torpedoed this bill does not mean the country wants to follow them down the path of deregulation.

    Giving the Freedom Caucus the keys to health care policy would be a great way to lose the Rust Belt and with it, the Presidency.

    If Trump can marginalize the hardliners, he can make clear that it is nationalism that is on the agenda, not libertarianism.

    And if he can rescue the public from the death throes of Obamacare via a single payer system, he can remove one of the few remaining populist issues that the Democrats have left to run on in national elections.

  4. Well border adjustment taxes would be huge. He's absolutely right to push for that. Would help make corporate taxes more balanced and probably raise some revenue. Hope the Freedom Cucks don't mess that up too.

  5. There are no hardline conservatives. Few ever read Edmund Burke, Russell Kirk, or even Buckley. Anybody who started before Reagan's amnesty, Bush Sr.'s taxes, and Clinton's pre-gay marriage DA-DT is considered really outdated, so everyone adapts to the neo - liberal and -conservative ruling class's dominance.
    I started reading Pat Buchanan's e-newsletter, and boy, it's boring so far. He has little to say that's not just analysis. But I hope his books are better.


    "lower drug prices"

    That's symbolic. Lowering the duration of intellectual property protections is necessary to upend the incumbent pharma industry's monopolists.


    Maybe ending remittances would only allow America-loving guest workers to come here. It's just another dreamy 'economic nationalist' policy, to not let people who won't solve their homelands' economic problems bring them to us and harm our economic well-being. It sounds aggressive and oppressive to libertarians, but modest and necessarily defensive to the Americans who have fled from places like California.

    I would also like citizenship tests for everyone, administered between ages 18-21, and later every 15 years, which would actually reject some American-born people as ineligible for voting, owning property, etc. High standards of national identity are not about birthplace, especially in light of how America's laws used to explicitly exclude many people born here.


    The Freedom Cucks, I suspect, are all self-righteous transplants, who are 'conservative' because of paranoia that their striving will be limited, not sincere sentiments. They need to be reasonably challenged, not just complained about.

    I do worry America cannot accomplish single-payer in the end. We might have a moderate system, where ~60%, not 80%, of healthcare spending is covered by tax revenues. That would be ok.


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