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Assuming for a moment that the purpose of tariffs is to shift consumer spending away from foreign imports and towards domesticly manufactured products,
Shouldn't you want retailers to break-out the tariff cost into a seperate legible line item?
A story broke this morning that Amazon was going to start labeling products with the tariff charged on each item to make the price changes legible to the consumer. From the perspective of a protectionist economic policy, this is a good thing. It makes it unignorably clear which items are made in China and which items are made in America. It also shows the direct monetary incentive for you the consumer to but the Made in America item over the Made in China item.
From the perspective of whatever the hell the Trump administration is trying to do, this is a disaster. I understand that governments would prefer the populace not be particularly mindful of how much money they pay in taxes, but it is another thing alltogether to hear this articulated by the press secretary as something that they think makes the administration look good to the public. The official line from the MAGA infuencer types on Twitter is that retailers are doing this as a distraction from the fact that they sell cheap slop from Asian sweatshops, but this is actually highlighting the fact that they sell cheap slop from Asian sweatshops.
Of all sad words of tongue or pen, the saddest are these,Hanania was right again.
I mean, it's a lie. Highly misleading, at least. It's clearly intended to communicate to the consumer that they're assuming the whole burden of the tax. This simply isn't how taxes work. The burden is split between buyers and sellers according to the relative elasticity of supply and demand. This is hard to measure in practice but you should never expect to see it go 100% one way or the other. They can list the tax as a line item if they like, it doesn't change the reality of the situation for them: if they want to maximize their profits, they'll have to reduce their margins. Of course, the maximum possible profit may in fact be negative now...
As @anti_dan says, so far as the consumer is concerned, it's no different from any other government-imposed cost, including both non-tax impositions like costly regulatory requirements and each direct and indirect tax on a business's operations: sales tax, which is often reported, but also corporate income tax, capital gains paid on their stock (which reduces share price, which reduces the amount of liquidity they can raise through sales, which can be compared to the cost of loaning that capital to get an equivalent rate), their employees' income tax (of which, again, they bear some of the incidence). Sellers love to complain about their costs, but at the end of the day all that matters to the consumer is the product they offer and the cost they offer it at.
(Though, as others have intimated, perhaps the real goal is to propagandize against the tax in the hopes they will later be able to offer the same product at a lower price. That does raise the question why they weren't already doing this for all those other taxes, however.)
For that matter, where do all these people who think taxes being paid is a bad thing go when the discussion turns to income tax, or payroll tax, or social security? I'm not convinced the marginal government dollar isn't net-negative, but Democrats don't generally hold that position. The money actually paid into the tariffs is no better or worse than any other source of tax dollars: the downside is all the transactions that don't occur because of the tariffs. I suppose that's harder to communicate, though.
Tariffs are generally bad. They can play a part in a net-positive strategy, but these obviously don't: the tariffs are the whole strategy. Are they bad enough to justify lying to make them look worse than they are, or bad in different ways? I'm not sure.
Actually, I’d say there’s a better case for itemizing tariffs than sales tax, since the latter doesn’t actually give you any choice. The state of Texas is going to get its cut no matter which goods Amazon sells to Texans.
This does make me wonder if tobacco companies are prohibited, in some way, from itemizing vice taxes. I’d have thought they would be eager to remind customers why they’re paying more.
They don’t think that. They think having to pay a tax is a bad thing. What happens after that is handwaved.
Nor do they really go anywhere. If a traditional tax hike was on the table, they’d flip out about it, too. But Trump is a populist, and has demonstrated less than zero interest in the normal legislative process, so that’s a non-starter.
I'm old enough to remember a time before online retailers regularly collected sales taxes (apparently nationwide starting in 2017 after a SCOTUS decision).
Huh, you’re right. Somehow I never noticed this.
Wayfair would have been the biggest tax news in the tax consulting business by far if it weren’t for a certain piece of legislation passed that same year.
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Those were the days. Technically you still owed sales tax and you were supposed to report it to the state yourself, but nobody did that. It was probably unavoidable that online retailers would start to collect sales tax (state governments weren't just going to give up a big revenue source), but it was nice while it lasted.
Could you get a PO box in a tax free state and then tell USPS to forward it?
This is very illegal in the US. You would have to ship it overseas from your PO box and then import it back again relying on exemptions there, which ofc has been made non-viable due to tariffs...
The question is how/if it could be enforced.
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Hey, I guess Trump actually closed a tax loophole!
Been illegal long before Trump. Funnily enough I as a non-US person can buy stuff and have it shipped to my virtual address in NH without any sales tax and then sent to me overseas but people in the US get busted by the feds if they try to do the same...
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