By Linda L Barton
With President Trump putting tariffs of 25% on steel and 10% on aluminum imports, there have been numerous heated discussions on the different media outlets. The response to President Trump’s tariff announcement has been frenzied, as it appears no one understands its intended goal. Many have called this move by President Trump as “remarkably stupid” and went on to talk about the risk to global trade. The European Union threatened to respond with tariffs of their own on three iconic exports: Harley Davison motorcycles, bourbon whiskey, and blue jeans.
What’s amazing is how people don’t seem to remember the promises made by candidate Trump. While running for President, Donald Trump’s economic plan proposed:
- Tax cuts
- Reduced regulations
- Lower energy costs
- Eliminating America’s chronic trade deficit.
Hmmm, let’s see how he is fulfilling those promises.
First, Tax Cuts: We all heard cries of gloom and doom if President Trump’s tax cut bill passed and how it was a fool’s mission. Unfortunately, for the likes of Nancy Pelosi, and her Democrat minions, the opposite happened. More Americans kept MORE of their money, companies started to expand and hire more workers, companies began coming back to the US, and workers received bonuses of up to $2,500. Now, that’s what I call “crumbs” we can all enjoy.
Second, Reduced Regulations: Wow, talk about giving the country a shot in the arm. The removal of job-killing regulations has lifted the heavy arm of government off businesses and allowed them to breathe again. This is the silent benefit most Americans don’t understand, but business owners are enjoying the freedom to do business again without all the red-tape of government regulation.
Third, Lower Energy Costs: With the opening of ANWR for oil drilling in Alaska, and the Keystone pipeline, as well as the lifting of regulations on the energy industry, we are well on our way of becoming truly energy independent. Another benefit is the fact, we are on our way of being a powerhouse exporter of energy to other countries, thus cutting the power of OPEC and Russia as energy providers. Talk about a WIN/WIN.
Lastly, Eliminating America’s Trade Deficit: This is a promise President Trump has beat the drum about since the beginning of his bid for the Presidency. We’ve all heard him say how he’s tired of the US companies and workers being ripped off by foreign governments and the horrible agreements made by past administrations. President Trump has repeatedly stated, how we cannot be strong as a country if we are involved in deals that are not fair to the American companies and workers. What’s wrong about charging a tariff on imported goods if we are charged for those we export? Fair is fair, right?
Each time the President has checked another promise off his list, it seems those from the elite class in politics lose their collective minds. They say it will be the death of the American economy, but the opposite has happened. So much for understanding how to make money and be successful. Maybe they need to take a few lessons from President Trump.
Earlier today, my husband made an excellent comment about politicians today. He compared them to a junkie who would do anything for their next fix. Or the alcoholic who will destroy their families as they reach for that next drink. That is how so many of our elected officials act when it comes to deals with foreign governments. You can’t tell me they aren’t collecting MILLIONS of dollars from lobbyists to sway their vote. I’m also sure when it comes to dealing with a country we trade with, such as China and those in the EU, they will never once consider what is best for American companies and workers. Our elected officials are drunk with power and desire for wealth. They have sold us out to countries that do NOT have our best interest at heart. Then they have the nerve to tell us we are foolish if we complain and demand better deals.
However, President Trump understands money and how to make it. He understands how to make a deal that is fair to all concerned while making sure the USA is a winner in the process. The rest of the world feels it’s just fine to put tariffs on Americans goods they import. So, why isn’t it okay for us to do the same? Tariffs are NOT something new. In fact, it’s something our Founding Fathers understood was necessary.
It appears today; there is no clear understanding of how tariffs were used for the federal government funding its operations BEFORE the passage of the 16th Amendment better known as the Federal Income Tax in 1913. However, what the President has recently done was a normal practice for roughly 150 years.
From the beginnings of this country, the U.S. government was able to pay for its expenses without an income tax. The new federal government’s responsibilities were limited to basic operational matters and did not include such things as social insurance programs, welfare programs or even agricultural subsidies.
During the early decades of America’s history, most of the federal government’s revenue came from import taxes called tariffs. The U.S. Congress passed the Tariff Act of 1789 to help generate revenue to pay off its war debts and to encourage and protect manufacturers in the northern states. Congress also passed major tariff bills in 1816, 1824, 1828 and 1832.
However, those in government felt they needed more money, so the American worker became a new source of revenue. Article I, Section 9 of the U.S. Constitution states, “No Capitation or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.” A federal income tax had been enacted in 1861, but it was struck down as unconstitutional by the Supreme Court in 1895. The reason was it was found to be a direct tax outside the constitutional constraints. However, Congress removed these limits in 1913 with the passage of the 16th Amendment, which allowed it to impose income taxes specifically, “without regard to any census or enumeration.”
Congress enacted the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% to finance World War I. However, the average rate for the rich was only 15%. The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925 and finally to 24% in 1929. In 1932, the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% on all income over $200,000 in 1945. During World War II, Congress introduced payroll withholding and quarterly tax payments. Do you see a pattern here? But they didn’t stop there. Nope, not at all.
Estate and gift tax, At the beginning of the 20th century President Theodore Roosevelt advocated the application of a progressive inheritance tax on the federal level, more commonly known as The Death Tax. Congress then passed the Revenue Act of 1924, which imposed the gift tax, a tax on gifts over a certain monetary value.
Payroll Tax, the FICA tax as the means to pay for Social Security. President Franklin D. Roosevelt introduced the Social Security (FICA) Program. FICA began with voluntary participation where you paid 1% of the first $1,400 of your annual income into the Program. The money put into the Program would also be deductible from your income for tax each year. The money put was then put into an independent “Trust Fund” rather than into the General operating fund. How many of us remember being told our FICA would be there for us when we retire? We were promised that money would only be used to fund the Social Security Retirement Program, and no other Government programs, and, once we began receiving our payments, they would never be taxed as income. However, during the Lyndon B. Johnson administration, Social Security moved from the trust fund “lockbox” to the general fund. Taxpayers were no longer given an income tax deduction for Social Security withholding. Then Immigrants became eligible for Social Security benefits during the Carter administration even if they hadn’t paid into the fund over several years, and finally, during the Reagan administration, Social Security annuities became taxable income even though we were promised we would not be taxed on that money. Another example of politicians drunk or high on taxpayer money.
Alternative Minimum Tax (AMT): The alternative minimum tax (AMT) was introduced by the Tax Reform Act of 1969 and went into effect in 1970. Its goal was to target 155 high-income households that had been eligible for so many tax benefits that they owed little or no income tax under the tax code of the time. However, over time, the AMT punished taxpayers for having children or living in a high-tax state, and the complexity of the AMT would often lead to most taxpayers who owe AMT not realizing it until preparing their returns or being notified by the IRS.
Capital Gains Tax: this is another tax on Americans who try to achieve success. If you make a smart investment and sell it at a profit, bam, you are hit with a capital gains tax. It doesn’t matter if you’ve paid taxes on the product already, the taxman will gladly take his fair share of YOUR good deal. We learned that tough lesson when we sold our trucking business. The IRS hit us and hit us hard. They made it impossible to find shelter from this upsetting and yes, unfair form of tax.
Corporate Tax: The United States’ corporate tax rate was at its highest, an unbelievable 52.8 percent, in 1968 and 1969. Later the top rate was set in 1993 to 35%. However, President Trump pushed for the “Tax Cuts and Jobs Act” of 2017, where the rate adjusted to 21%. Since that passage, companies are returning to the USA, expanding their workforce, and paying their employees some generous bonuses.
So, as you can see the US Government has gone from using Tariffs to fund itself to do the limited necessary things needed to run a country, to become a bloated bureaucracy, unfairly taxing its people at a ridiculous rate.
I find it amazing how so many in Congress would find a Tariff on imported goods a bad thing. Heck, that brings money into the IRS piggybank, doesn’t it? To be honest, I don’t know of too many politicians who would say NO to a tax… that is unless someone is paying them to think otherwise.
American workers in the steel industry seem to find these proposed tariffs good news for their jobs. It seems the only ones opposed are politicians, foreign governments, and their companies. As taxpayers, my husband and I felt the hot breath of the IRS on our necks when we owned our trucking company. We paid tax on top of tax. Heck, we even paid fuel tax on fuel we didn’t buy. You see states charge commercial vehicles fuel tax on the miles you drive in their state, even if you don’t buy a single gallon of fuel. Yeah, I didn’t understand how they could do that either, but they sure did.
As an American, I want to see our country strong again. I want to see Americans having GOOD jobs again. I want to see our national debt lowered, and I want our companies to have a FAIR and EQUAL playing field. President Trump has made a promise to Make American Great Again, and he damn-well is doing a good job of it. So get out of his way, you corrupt politicians because we have a strong leader in the Oval Office.