OPINION:
President Trump hopes to reverse the damage done by one of history’s worst presidents. No other commander in chief has dared restore the prominence of the government funding mechanism we relied upon before Woodrow Wilson unleashed what became the Internal Revenue Service.
“In 1913, they traded to the income tax system. We used to be all tariff. We had no income tax, and we had the wealthiest country proportionally from about 1870 to 1913. … We had more money than anybody. … We’re going to be able to substantially lower taxes when this is finished,” Mr. Trump said.
The gist is to use the substantial revenue collected from duties on imported goods to counter the hit the Treasury would take if income tax rates were lower. He has already shifted the debate well beyond eliminating taxes on tips, Social Security benefits and overtime pay. If successful, his plan would entirely knock a few million citizens off the tax rolls.
“Why not advantage stuff that’s made in Michigan, Maine, Pennsylvania and California, and not stuff that’s made in China and Japan? Other countries do that to us, so it essentially levels the playing field,” economist Stephen Moore said of the tariffs on Fox Business.
A handful of Republican lawmakers prefer to ditch the tariffs and raise the top rate for “millionaires” to fund trimming rates for everyone else. Sen. Bernard Sanders, Vermont socialist, may consider suing them for plagiarism.
Mr. Moore and others insist cuts must apply across the board. As one of the architects of the president’s winning 2017 tax relief package, he suggests a 15% rate for everything: a 15% tariff on goods, a 15% personal income tax rate, a 15% corporate tax, and so on.
Reducing the tax code’s complexity offers certainty for businesses. Lowered rates create an incentive for expansion. Overall, it’s a recipe for prosperity.
Democrats are naturally worried about any scheme that risks triggering economic growth. California Gov. Gavin Newsom grabbed the nearest microphone to express outrage over the administration’s recent moves. “I’ve got four kids,” he said, fretting about import levies. “Eighty percent of the toys under the Christmas tree come from China.”
Probably more worrisome to the 2028 presidential aspirant is the impact tariffs have on the price of brie and caviar at the French Laundry, his favorite restaurant. Earlier this month, Mr. Newsom launched a lawsuit to stop those import duties, arguing that Congress must approve them. He expected that a liberal federal jurist wouldn’t hesitate to impose a nationwide injunction blocking the president’s trade negotiation authority.
Surprisingly, U.S. District Judge Jacqueline Scott Corley, an appointee of President Biden, didn’t immediately oblige. She scheduled a hearing for May 22 to determine whether she even has a legal right to entertain Mr. Newsom’s request.
Federal law is clear that the U.S. Court of International Trade “shall have exclusive jurisdiction” over such disputes. Although the California leader is right to declare that the House and Senate ought to have a say in all matters affecting American pocketbooks, the reality is that the legislative branch lacks the will to do anything controversial.
Mr. Trump is happy to fill the leadership vacuum and do what’s needed to correct the great Wilsonian mistake that spawned America’s most hated federal agency. The 47th president won’t be able to get rid of the IRS anytime soon, but a simpler tax code with an eased burden points us in the right direction.
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