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Thread: Trump’s Latest Tariff Plan Just Replaces One Tax with Another

  1. #1

    Trump’s Latest Tariff Plan Just Replaces One Tax with Another


    Mises Wire
    Ryan McMaken
    10/24/2024



    Donald Trump on Monday floated the idea that he might seek to replace the federal income tax with federal taxes on imports—also known as tariffs.

    This is potentially a good idea, but not for economic reasons. There is no economic reason why tariffs are any better or any worse than the income tax. A tariff, which is just a tax, is no less compulsory than the income tax. A tariff is no less destructive to private wealth and capital than the income tax. Contrary to various protectionist myths, Americans pay tariffs like they pay any other tax imposed by the US government.


    [Read More: “How to Look at Tariffs“ by Murray Rothbard]


    On the other hand, a tariff isn’t necessarily worse than an income tax. Yes, tariffs act to diminish trade, and that’s a bad thing. But income taxes do the same. When people pay taxes of any kind—whether they are income taxes or tariffs, people have less money to spend on—or invest in—everything, regardless of where it is made or located.

    The only reason why it might be a good thing to “replace” income taxes with tariffs—note that we’re not being offered any significant cuts in taxes overall—is that income taxes have always been a way for the federal government to engage in wholesale violations of individual privacy. Since the legalization of the income tax in 1913, the federal government has claimed the power to monitor every wage earner’s income. Theoretically, replacing income-tax revenue with tariff revenue would reduce the number of Americans who must report all their financial affairs to the federal government every year. That’s not an economic argument, it’s a political one, and maybe that’s reason enough to bother abolishing the income tax, even if something else replaces it. In economic terms, though, let’s not pretend replacing one tax with another makes anyone more free or better off.


    The Problem with Tax Reform

    All this talk about “replacing” one tax with another means we’re talking about tax “reform,” not tax abolition. Every now and then, we encounter various types of tax “reform” such as replacing the progressive income tax with a flat tax, or replacing income taxes with a VAT tax or national sales tax. There is rarely any reason to get very excited about tax reform, because it usually just rearranges the tax burden without endangering the regime’s ability to collect huge amounts of revenue.

    As with most tax reform plans, the Trump proposal to replace one tax with another is based on the premise that overall tax revenue should be “revenue neutral.” That is, the amount of tax revenue extracted from Americans will be more or less the same, and the American state will continue to have many trillions of dollars to spend each year. That’s not exactly a great blow to state power, nor does it offer any sort of boon to economic activity or the standard of living for ordinary Americans.


    Read More: “The Myth of Tax Reform“ by Murray Rothbard


    Moreover, when it comes to Trump’s proposal, the details of what we mean by “income tax” matter a lot. When Trump says he wants to abolish “the income tax,” its unclear if he just means the graduated income tax, or all taxes on income. After all, all wage earning Americans pay enormous amounts of taxes in the form of payroll taxes. Payroll taxes are income taxes, and in order to collect them, the government demands access to the details of everyone’s earnings.

    So, any benefits in terms of added privacy and freedom will only be achieved if all taxes on income are abolished. That means no graduated income tax, no payroll taxes at all, and the abolition of all the machinery of the IRS.

    If Trump only abolishes the graduated income tax and replaces it with high tariffs, then our position is hardly improved. The federal government still monitors all our earnings, and we get to pay a lot more for basic goods. That’s the sort of tax reform that is not worth caring about.

    For argument’s sake, though, let’s say Trump abolishes all income taxes and replaces them with tariffs—which would exactly “replace” the revenues formerly obtained through income taxes. In terms of financial privacy, this would be a good thing for our everyday lives. Regular people who are not directly involved in international trade would generally not have to worry about the endless paperwork that comes with income taxes. That’s all to the good. Economically speaking, though, the “reform” makes no difference. Tariffs would still be sucking trillions of dollars out of the private economy in a way similar to income taxes.

    Moreover, with tariffs rising to much higher levels, efforts to avoid tariffs will become much more widespread, and smuggling will become an occasion for much federal handwringing. As federal bureaucrats do now with income taxes, there will be demands for more taxpayer money to staff agents to enforce tariffs mandates.

    Again, this isn’t necessarily any better or worse than the situation with income taxes, but these facts are reminders that all taxes require enforcement, and tariffs are hardly some kind of kindler, gentler tax.


    What Real Tax Reform Would Look Like

    No revenue-neutral will ever make any real difference to the size and scope of the state, however.

    The only change that would make a real difference is a program of sizable cuts to both taxes and spending. Tax cuts alone will never make us better off because tax cuts without spending cuts only means bigger deficits. Bigger deficits mean more inflationary monetary policy and more price inflation. Tax cuts without spending cuts mean the tax burden is merely shifted from nominal taxes to the de facto tax of price inflation.

    If a politician claims to be a “tax cutter,” he is not to be taken seriously unless he’s also for cutting spending. When Trump rearranges tax programs or cuts taxes while also signing off on more deficit spending, he is really raising everyone’s inflation tax. No tax “reform” changes this.



    Read More:




    https://mises.org/mises-wire/trumps-...ne-tax-another

    ____________


    Mises Institute

    An Agorist Primer ~ Samuel Edward Konkin III (free PDF download)

    The End of All Evil ~ Jeremy Locke (free PDF download)



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  3. #2
    In history:

    2012: When "republicans" supported "Flip-Flop" Mitt.

    2024: When "republicans" supported "Bait and Switch" Trump.
    ____________


    Mises Institute

    An Agorist Primer ~ Samuel Edward Konkin III (free PDF download)

    The End of All Evil ~ Jeremy Locke (free PDF download)

  4. #3
    You dorks must really really really hate tariffs if you'd rather keep the income tax than get any more tariffs lol
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  5. #4
    Quote Originally Posted by TheTexan View Post
    You dorks must really really really hate tariffs if you'd rather keep the income tax than get any more tariffs lol
    What are you talking about?

    All the article says is tax is tax.

  6. #5
    Quote Originally Posted by acptulsa View Post
    What are you talking about?

    All the article says is tax is tax.
    Which is a lie.
    The Income tax is not avoidable the way a tariff is and it's a 4th and 5th amendment violation, it also allows much finer government manipulation of behavior.
    And Tariffs build up our economy and make everyone better off in the long run.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  7. #6
    Quote Originally Posted by Swordsmyth View Post
    Which is a lie.
    The Income tax is not avoidable the way a tariff is and it's a 4th and 5th amendment violation, it also allows much finer government manipulation of behavior.
    And Tariffs build up our economy and make everyone better off in the long run.
    If you're really interested in "better taxes" why are you supporting Trump? He's responsible for more than half of the current inflation, and that's the single most regressive tax of all.

  8. #7
    Quote Originally Posted by acptulsa View Post
    If you're really interested in "better taxes" why are you supporting Trump? He's responsible for more than half of the current inflation, and that's the single most regressive tax of all.
    Nonsense, congress, the deepstate, and the global cabal are responsible for any from his administration and Biden is responsible for far more than half.
    And his plans will vastly reduce or eliminate it.

    Camela (who you are helping by attacking Trump) will set off hyperinflation.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  9. #8
    Quote Originally Posted by Swordsmyth View Post
    Nonsense, congress, the deepstate, and the global cabal are responsible for any from his administration and Biden is responsible for far more than half.
    And his plans will vastly reduce or eliminate it.

    Camela (who you are helping by attacking Trump) will set off hyperinflation.
    Don't worry, most of the libertarians out there are getting the message.

    In this case, it was Kamala doing a campaign event with Liz Cheney.. Dave finally had enough a said "$#@! it"

    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc
    "You don't need a medical degree to spot obvious bullshit, that's actually a separate skill." -Scott Adams
    "When you are divided, and angry, and controlled, you target those 'different' from you, not those responsible [controllers]" -Q

    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."



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  11. #9
    Quote Originally Posted by dannno View Post
    Dave finally had enough a said "$#@! it"
    Do you ever have anything to say but, this celebrity thinks this and that celebrity thinks that?

    Tariff tax, man. Does your bosom buddy Dave have anything to say about that?

  12. #10
    Tariffs are slightly less destructive than income taxes, so it's a small step in the right direction. But without a reduction in spending this will not be possible. And let's be honest, Congress will never go along with it, nor will they go along with any reduction in spending.

    Let's also not forget that Trump was the one who started all of the inflation in 2020 with Biden making it much worse.
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  13. #11
    Quote Originally Posted by acptulsa View Post
    Do you ever have anything to say but, this celebrity thinks this and that celebrity thinks that?

    Tariff tax, man. Does your bosom buddy Dave have anything to say about that?
    Lol, yes he does. He goes on Timcast periodically and argues against Trump's policies and has always said he won't vote for him. Not to mention he has his own show, I'm sure he has plenty to say on that.

    And... celebrity?? If he had run for President in the Libertarian party, he would have won handily. That's not just a random "celebrity", lol... you have a really weird way of framing $#@!.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc
    "You don't need a medical degree to spot obvious bullshit, that's actually a separate skill." -Scott Adams
    "When you are divided, and angry, and controlled, you target those 'different' from you, not those responsible [controllers]" -Q

    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  14. #12
    Quote Originally Posted by dannno View Post
    And... celebrity?? If he had run for President in the Libertarian party, he would have won handily. That's not just a random "celebrity", lol... you have a really weird way of framing $#@!.
    Either that, or you have a very common way of justifying not thinking for yourself.

  15. #13
    Quote Originally Posted by acptulsa View Post
    Either that, or you have a very common way of justifying not thinking for yourself.
    I supported Trump before he did, he literally just finally came out yesterday and said he was pulling the trigger.. even then I think he said "probably", but he titled his own episode that he was, so I'm gonna say he is. Before that he's been on your side the whole time..

    He's just giving Mises libertarians a fake "because" to vote for Trump, or to be vocal that they are doing so, because he knows it will be a lot worse under Kamala. Also said he is going to continue to criticize Trump when he's wrong. All totally reasonable.
    Last edited by dannno; 10-25-2024 at 10:30 AM.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc
    "You don't need a medical degree to spot obvious bullshit, that's actually a separate skill." -Scott Adams
    "When you are divided, and angry, and controlled, you target those 'different' from you, not those responsible [controllers]" -Q

    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  16. #14
    @Swordsmyth
    Quote Originally Posted by dannno View Post
    I supported Trump before he did

    Trump’s Road to Socialism ~ Mises Institute
    ____________


    Mises Institute

    An Agorist Primer ~ Samuel Edward Konkin III (free PDF download)

    The End of All Evil ~ Jeremy Locke (free PDF download)

  17. #15
    Quote Originally Posted by acptulsa View Post
    What are you talking about?

    All the article says is tax is tax.
    Oh wow, you summarized this entire article into one sentence. He should have just written what you just wrote, and you would have saved him 15 paragraphs that apparently don't add any value or additional meaning to the subject, because as you so succinctly put it, a tax is indeed a tax. If that was his only point in writing this article, gee, well, this whole thread seems like a waste of time.
    Last edited by TheTexan; 10-25-2024 at 12:52 PM.
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  18. #16
    I got an idea. Let’s do the tariffs first. Then we can work on eliminating the income tax afterwards.
    Chris

    "Government ... does not exist of necessity, but rather by virtue of a tragic, almost comical combination of klutzy, opportunistic terrorism against sitting ducks whom it pretends to shelter, plus our childish phobia of responsibility, praying to be exempted from the hard reality of life on life's terms." Wolf DeVoon

    "...Make America Great Again. I'm interested in making American FREE again. Then the greatness will come automatically."Ron Paul



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  20. #17
    Quote Originally Posted by Matt Collins View Post
    Tariffs are slightly less destructive than income taxes, so it's a small step in the right direction. But without a reduction in spending this will not be possible. And let's be honest, Congress will never go along with it, nor will they go along with any reduction in spending.

    Let's also not forget that Trump was the one who started all of the inflation in 2020 with Biden making it much worse.
    Yea it's pretty obvious it's not going to go anywhere, but I'll take whatever verbal wins I can get at this point
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  21. #18
    Quote Originally Posted by TheTexan View Post
    Yea it's pretty obvious it's not going to go anywhere, but I'll take whatever verbal wins I can get at this point
    Historically, every time there is "republican" win, I always lose.

    When Trump rearranges tax programs or cuts taxes while also signing off on more deficit spending, he is really raising everyone’s inflation tax.
    NSA passed by the 80th Republican congress, CIA head George H Bush, FBI under Coolidge, TSA under George W Bush, Nixon and the Gold Standard 1971, Travel Bans and now Agenda47 under Trump.

    All I want to know is, when can we please stop winning?
    ____________


    Mises Institute

    An Agorist Primer ~ Samuel Edward Konkin III (free PDF download)

    The End of All Evil ~ Jeremy Locke (free PDF download)

  22. #19
    Quote Originally Posted by PAF View Post
    Historically, every time there is "republican" win, I always lose.



    NSA passed by the 80th Republican congress, CIA head George H Bush, FBI under Coolidge, TSA under George W Bush, Nixon and the Gold Standard 1971, Travel Bans and now Agenda47 under Trump.

    All I want to know is, when can we please stop winning?
    I thought you said there was no difference between the parties?
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  23. #20
    Quote Originally Posted by TheTexan View Post
    I thought you said there was no difference between the parties?
    ____________


    Mises Institute

    An Agorist Primer ~ Samuel Edward Konkin III (free PDF download)

    The End of All Evil ~ Jeremy Locke (free PDF download)

  24. #21
    I think I’m really starting to like this tariff idea, at least as much as I like price inflation.

    After all, who doesn’t love paying higher prices for the every day items that keep life running smoothly? You know, luxury items like food and clothing and anything that uses steel and…
    Chris

    "Government ... does not exist of necessity, but rather by virtue of a tragic, almost comical combination of klutzy, opportunistic terrorism against sitting ducks whom it pretends to shelter, plus our childish phobia of responsibility, praying to be exempted from the hard reality of life on life's terms." Wolf DeVoon

    "...Make America Great Again. I'm interested in making American FREE again. Then the greatness will come automatically."Ron Paul

  25. #22
    Quote Originally Posted by Matt Collins View Post
    Let's also not forget that Trump was the one who started all of the inflation in 2020 with Biden making it much worse.
    Not to deprive Trump of his share of the blame, but I'm pretty sure he's not even remotely close to being "the one who started all of the inflation" ...
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      -- The Law (p. 54)
    • "Government is that great fiction, through which everybody endeavors to live at the expense of everybody else."
      -- Government (p. 99)
    • "[W]ar is always begun in the interest of the few, and at the expense of the many."
      -- Economic Sophisms - Second Series (p. 312)
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  26. #23
    Quote Originally Posted by Occam's Banana View Post
    Not to deprive Trump of his share of the blame, but I'm pretty sure he's not even remotely close to being "the one who started all of the inflation" ...
    You're right. He needed help:

    Ron Paul: "Those tempted to blame the increases on President Biden, the Democratic Congress, or the Covid-related spending spree should consider the debt increase by around $1 Trillion a year in 2017, and 2018, years when the Republicans controlled the White House and both houses of Congress."
    ____________


    Mises Institute

    An Agorist Primer ~ Samuel Edward Konkin III (free PDF download)

    The End of All Evil ~ Jeremy Locke (free PDF download)

  27. #24
    Quote Originally Posted by PAF View Post
    You're right. He needed help:
    Ron Paul: "Those tempted to blame the increases on President Biden, the Democratic Congress, or the Covid-related spending spree should consider the debt increase by around $1 Trillion a year in 2017, and 2018, years when the Republicans controlled the White House and both houses of Congress."
    Whatever help he had in contributing to the problem, he's still not even remotely close to being "the one who started all of the inflation".

    You see, back in 1913 ... oh, hell, whatever, just skip it.



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  29. #25
    Quote Originally Posted by Occam's Banana View Post
    Whatever help he had in contributing to the problem, he's still not even remotely close to being "the one who started all of the inflation".

    You see, back in 1913 ... oh, hell, whatever, just skip it.

    Yes, of course, but it's not 1913 anymore, it's election season now. We now have to do our civic duty and choose between Trump-Socialism and Kamala-Socialism. That's what really important
    ____________


    Mises Institute

    An Agorist Primer ~ Samuel Edward Konkin III (free PDF download)

    The End of All Evil ~ Jeremy Locke (free PDF download)

  30. #26
    Quote Originally Posted by CCTelander View Post
    I think I’m really starting to like this tariff idea, at least as much as I like price inflation.

    After all, who doesn’t love paying higher prices for the every day items that keep life running smoothly? You know, luxury items like food and clothing and anything that uses steel and…
    I like to think of it differently, via a bit of a thought experiment. Imagine that World War III breaks out and America just straight up dominates, nukes every other country in the world, and America itself is entirely undamaged and left intact. Literally 0 survivors outside of America.

    Would it be tough for a little while? Yea, tons of stuff would skyrocket in price for the first few years.

    But after a few years the prices would go back to normal, and at least economically speaking, not much would be different in the day-to-day life of the average American.

    So, as long as you accept the general estimation of this thought experiment, you can put a rough price tag on how much global trade is actually worth. Global trade is worth about several years of American hardship. If we were to get rid of it entirely, that's how much it would cost, and if we don't get rid of it, that's how much we would gain.

    While that is a very significant cost, for sure, one thing that a person would notice, if so logically inclined, is that this thought experiment proves that the benefit of global free trade is a fairly static value (in terms of years of hardship). It also proves that there is not really any ongoing benefit to global free trade.

    The primary benefit of global free trade, is that we can put off having to pay the several years of hardship that would be required to end free trade.

    And while that is a valid reason in of itself to continue free trade, I think it's important to recognize that global free trade isn't some amazing thing that adds enormous value to the world.

    If everyone but America disappeared tomorrow, the economy would keep plunking forward just as it always has, and the detriment to the economy would be short lived that could be measured in years.

    The point is: free trade is not even that economically important. One can argue that free trade is good, one can argue that free trade is bad, but it's pretty hard to reasonably substantiate any claim that the economy wouldn't be able to function pretty well without it.

    As such, the economic benefits of global free trade are provably small.

    The costs of free trade, can be however enormous, including leading to a one world government, and the destruction of sovereignty.

    So, all of that is a long winded way to say, I hope your free trade is worth it?
    Last edited by TheTexan; 10-25-2024 at 03:11 PM.
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  31. #27
    Quote Originally Posted by PAF View Post
    Yes, of course, but it's not 1913 anymore, it's election season now. We now have to do our civic duty and choose between Trump-Socialism and Kamala-Socialism. That's what really important
    *shrug* Nothing I said had anything to do with "election season" ... but sure, okay, that, too, if you like.

  32. #28
    Quote Originally Posted by Matt Collins View Post
    ...And let's be honest, Congress will never go along with it, nor will they go along with any reduction in spending.
    Not just Congress. The opposition from the tax prep and related accounting industry would be insane (who would in turn pressure Congress).


    https://x.com/USAB4L/status/1849932919802077226
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  33. #29
    Quote Originally Posted by Brian4Liberty View Post
    Not just Congress. The opposition from the tax prep and related accounting industry would be insane (who would in turn pressure Congress).


    https://x.com/USAB4L/status/1849932919802077226
    Yea it takes pretty much an anti-tariff-extremist to try to make any claims that exchanging income tax for tariffs, could be anything short of a big win for liberty

    Now, it's obviously not gonna happen, but that's a different point entirely
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  34. #30
    Quote Originally Posted by TheTexan View Post
    Yea it takes pretty much an anti-tariff-extremist to try to make any claims that exchanging income tax for tariffs, could be anything short of a big win for liberty
    Not if you're an even bigger anti-income-tax extremist (like me [1]).

    Replacing all income taxation with a low general tariff is what I would call a great start.



    [1] I consider myself to be both an anti-tariff extremist and an anti-income-tax extremist (IOW: I'm just an anti-tax extremist).
    Last edited by Occam's Banana; 10-25-2024 at 05:40 PM.

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