Let’s talk about tariffs and taxes, because every Leftist is now an expert. This is mostly because President Trump decided to use tariffs as a trade weapon.
If a Democrat made this move, Leftists would salivate and recommend the person for a Nobel Peace Prize in Economics.
Trump has been right about almost everything. From the banditos crossing the border bringing drugs, violence, and sex-trafficking with them. Like clockwork, Democrats accused Trump of being xenophobic, saying he hated Mexicans. Then Democrats opened the spigot and let millions of illegals come to America. And they obliged, committing heinous crimes and breaking our education system, our criminal justice system, even our elections. Democrats then claimed that in order to fix what they broke, they needed bipartisan congressional support. Once Trump re-elected, he single-handedly closed the border. Just. Like. That.
After almost every Democrat who condoned the invasion claimed that only Congress could fix the problem, President Trump fixed it with ease. Consider all the things that President Trump fixed in his first term and you would think he had earned some leeway to get things done.
Remember when Obama asked how Trump would save Carrier and bring manufacturing back. For Obama it would require a “magic wand”. As president-elect, Trump saved Carrier. Then he later brought manufacturing back to America, as promised.
Let’s take a look at tariffs and taxes from a historical point of view.
Tariffs have been around since ancient civilizations decided they didn’t want foreign merchants freeloading on their markets. Taxes, on the other hand, are a bit more personal. They’re like that friend who always “forgets” their wallet at dinner.
Let’s dive into the messy history of how governments figured out how to take your money—and why tariffs were the original “tax” before income taxes became the star of the show.
The Birth of Tariffs: Pirates, Protectionism, and Politics
Tariffs are older than your great-great-great-grandmother’s recipe for fruitcake. They date back to ancient times when kingdoms and empires realized they could make a quick buck by taxing goods crossing their borders. The Greeks, Romans, and Chinese all used tariffs to fund their empires and protect local industries.
Fast forward to the Middle Ages, and tariffs became a way for European monarchs to fill their coffers without directly taxing their subjects (who, let’s be honest, were already busy dealing with plagues and feudal lords).
In the U.S., tariffs were the federal government’s primary source of revenue for over a century. The Founding Fathers loved tariffs because they were a way to fund the government without directly taxing citizens. Alexander Hamilton, the original finance bro, was a huge fan. He saw tariffs as a way to protect fledgling American industries from British competition. By the early 1800s, tariffs accounted for about 90% of federal revenue. That’s right—90%! Imagine if today’s government relied that heavily on taxing imported goods. Your Amazon cart would be a lot more expensive.
But tariffs weren’t just about money. They were also about power. The Tariff of Abominations in 1828, for example, was so hated in the South that it nearly caused a civil war decades before the actual Civil War. Southerners called it “abominable” because it raised the cost of imported goods while protecting Northern industries. Sound familiar? It’s almost like history has a habit of repeating itself.
Income Taxes: From Whiskey Rebellion to W-2s
Now, let’s talk about income taxes, the government’s way of saying, “We see you’re doing well. Hand it over.” The U.S. didn’t always have an income tax. In fact, the Founding Fathers would probably roll over in their powdered wigs if they saw how much of your paycheck goes to the IRS.
The first federal income tax was introduced during the Civil War to help fund the Union’s war effort. It started at a modest 3% on incomes over $800 25,000 today). But like most government experiments, it didn’t go away after the war ended. Instead, it evolved.
By 1894, Congress passed a flat 2% tax on incomes over $4,000 130,000 today). The Supreme Court promptly struck it down, calling it unconstitutional.
Enter the 16th Amendment in 1913, which gave Congress the power to tax income “from whatever source derived.” Translation: “We’re coming for your money, and there’s nothing you can do about it.”
The first modern income tax rates started at 1% for incomes over $3,000 80,000 today) and topped out at 7% for incomes over $500,000 13 million today). Sounds reasonable, right?
Well, fast forward to World War II, and the top marginal tax rate hit a whopping 94%. Yes, 94%. That’s not a typo. It’s the government’s way of saying, “You’re rich? Congrats. Now give us almost everything.”
Today, income tax rates are more moderate, ranging from 10% to 37%, but they’re still a far cry from the 1% rates of 1913. And let’s not forget state and local taxes, sales taxes, property taxes, and the ever-popular “hidden taxes” on things like gas and alcohol. By the time you’re done paying taxes, you might feel like you’re funding the government all by yourself.
Tariffs vs. Taxes: The Eternal Debate
So, why do we have both tariffs and income taxes? Good question. Tariffs were originally designed to protect domestic industries and fund the government without directly taxing citizens. But as governments grew and wars got more expensive, income taxes became the go-to solution for raising revenue.
The problem with tariffs is that they can lead to trade wars, which are about as fun as they sound. When one country raises tariffs, another country retaliates, and before you know it, everyone’s paying more for everything. The Smoot-Hawley Tariff of 1930, for example, raised U.S. tariffs on over 20,000 imported goods. The result? A global trade war that made the Great Depression even worse.
On the other hand, income taxes are a more stable source of revenue, but they’re also deeply unpopular. Nobody likes seeing a chunk of their paycheck disappear before it even hits their bank account. And let’s be honest, the IRS isn’t exactly winning any popularity contests.
The Trump Factor: Tariffs Make a Comeback
Enter Donald Trump, the man who brought tariffs back into the spotlight. Love him or hate him, Trump’s trade policies were a throwback to the days when tariffs were America’s bread and butter. His administration imposed tariffs on everything from steel and aluminum to Chinese-made goods, arguing that they would protect American jobs and reduce the trade deficit.
Did it work? Well, it’s complicated, but yet. The U.S. trade deficit did shrink slightly during Trump’s presidency, but critics argue that tariffs hurt American consumers by raising prices on imported goods. Meanwhile, supporters point to the resurgence of American manufacturing and the renegotiation of trade deals like NAFTA as evidence that Trump’s policies were a success.
The Bottom Line: Taxes and Tariffs Are Here to Stay
Whether you’re a fan of tariffs, taxes, or neither, one thing is clear: Governments need money, and they’re going to get it one way or another. Tariffs may have been the original solution, but income taxes have become the backbone of modern government funding. I believe most people understand the need for government and don’t mind giving their “fair share”. The issue arises when it’s the government who determines “fair share”, and then spends money on whatever it decides.
