Tuesday, January 14, 2025

What did Donald Trump do today?

He said he'd invent a new government agency to collect taxes already collected by an existing government agency.

Today, Trump announced that he would "create" a new agency to collect tariffs. There is already such an agency: Customs and Border Protection. ("Customs" is another word for tariff.)

It's not clear why Trump made this announcement, which his staff was apparently not aware of. There is a growing disconnect between what Trump is determined to do on tariffs and what even his closest supporters are willing to tolerate. 

Tariffs are taxes imposed on imported goods, which are initially paid by American importers, and then those costs are passed along to American consumers in the form of higher prices. His latest proposals would amount to an average tax increase of $2,045 per household

Trump apparently genuinely believes that the federal government can be funded mainly by tariffs, as it was in the late 18th and early 19th centuries. At present, tariffs make up about 2% of all federal revenues

Presidents cannot simply create agencies or change how existing ones work without a law being passed through Congress, and the Republican-controlled Congress is in no mood to encourage Trump's tariff obsession.

Why does this matter?

  • Voters who heard Trump campaign on tax cuts might have thought he'd cut their taxes, not raise them.
  • If an idea is so bad that even your strongest supporters won't agree with it, the solution isn't to tweet about it without checking first.
  • Presidents should have at least a basic high school-level understanding of the economy.