TARIFFS: A tax on the consumer

Companies that use imported goods and materials tend to pass the costs of tariffs to their consumers. This helps them maintain profits, increasing the value of their shareholders’ investments. These higher prices are primarily paid by non-shareholders who do not participate in corporate earnings. The impact of tariffs was illustrated by a recent directive from President Trump to Walmart to “eat” the tariffs, and not pass the cost to consumers. Tariffs are a form of tax, borne mainly by the consumer.

We also see Congress proposing legislation to extend tax cuts that mainly benefit the wealthy. To help offset these tax cuts, spending reductions will be made to programs that benefit lower-income citizens. These program cuts will not completely offset the loss of tax revenue, leading to an increase in the national debt.

One rationale for tax cuts is that more money given to “job creators” creates new opportunities for employment, lifting people out of poverty. An unanswered question is, what businessman would build new factories and create jobs for products that have no market? To sell a product, there has to be a demand for the product along with a purchasing public with disposable income. Legislation resulting in the shift of wealth from the middle and lower-income levels of society to the wealthy seems not to provide for such a purchasing public.

The impoverishment of those without power for the benefit of those with power has happened time and time again in the history of “civilization.” Many of the world’s beliefs have spoken out against it, yet it continues. To paraphrase Gandhi, “There is plenty for everyone, but not enough for the few.” 

ERNEST WARNER

Coeur d’Alene