Hope, Despair, and Taxes
I had two recent conversations recently with friends who are not doing ok with the state of the country being what it is. I am not in a great place myself.
I am not a mental health expert but I would urge you to seek one out if needed.
But I think it’s perfectly normal to be having issues right now. The United States underwent an attempted coup for the first time in our history. One of the two major parties, after briefly condemning it, realized it was more beneficial to pretend it wasn’t a huge ordeal. Now those who attempted the coup are back in power. The men assaulting police that day have been pardoned with almost no pushback from the “law and order” party.
And now the man who plotted that coup is causing death and destruction on a scale we can barely comprehend.
It seems normal to me to have issues with day to day life with all of this happening.
But there are reasons to hope!
Elon Musk just spent an obscenely unprecedented amount on a Wisconsin Supreme Court race, saying the fate of the country hung in the balance for just this one race.
The race was not even close. Justice Susan Crawford defeated Musks’s candidate by ten points.
In the two Florida special elections, Republicans won both seats, BUT Democrats had double digit swings. Matt Gaetz won FL-1 last year with 66% of the vote. His replacement this week only hit 56%. Randy Fine saw the same ten point drop in FL-6.
A massive number of Trump’s actions have been blocked and/or undone by the courts.
It is difficult, perhaps impossible, to remain informed about this administration without being negative. What they’re doing is outright evil in many cases and extremely dangerous in others.
So savor these victories.
Today’s news was focused on a story made up equally of catastrophe and hilarious levels of incompetence.
Billing this as “liberation” day, Trump announced tariffs on nearly every country America trades with.
I’m not going to go into detail about how bad of an idea tariffs are. I will say we have centuries of data on this and every time a country tries to do what Trump is doing, the results are disastrous.
Instead I want to focus on how wildly incompetent this rollout is.
The Republican talking points on this are that the tariffs are “reciprocal,” i.e. we are charging tariffs at the same rate other countries charge for imported United States goods. That sounds reasonable.
Too bad it isn’t true.
To calculate the tariff rate other countries use, the Trump administration took the trade deficit (and ONLY included goods as including services lowers our trade deficits) and divided that by the amount of goods that country imports from the US.
They said this formula gives them the tariff rate.
If you can’t follow that you aren’t alone. These numbers have nothing at all to do with each other. An analogy I used is taking the amount you paid for a car, dividing that by your insurance premium, and then labeling the result as the number of miles you get per gallon. It’s completely nonsensical.
The White House is defending this calculation as accounting for all of the “cheating” other countries are doing.
The result is our “reciprocal” tariffs will hit imports from countries which do not apply a tariff to US goods at all.
I won’t speculate as to HOW bad this is going to be, but we are going to see a global effect here and price increases in the United States.
Tariffs after all, despite the protestation of Trump and his supporters, are simply taxes placed on a subclass of goods. They are not paid by foreign governments. They are paid by companies in the United States who will pass along those taxes onto consumers. (It’s actually quite elementary on why they are a bad idea when you inform people they’re simply a form of sales tax.)
And Trump is now instituting the largest tax increase in American history, which will disproportionately affect the poor and middle class. We have done this before. Go look up on the Smoot Hawley Act and its role in the Great Depression.
But while all of this is terrible, they are also hilariously incompetent at it.
We are rather oddly setting separate rates for territorial holdings and their parent countries. Given how small these places are, there’s no functional reason to do this. In my opinion, they just grabbed a list of places from Wikipedia and went from there.
Which means we now have a 10% tariff on goods imported from the British Indian Ocean Territory.
We do not import any goods from the British Indian Ocean Territory seeing as the only humans there live on the Diego Garcia Naval Base.
Donald Trump has applied a tariff to imports from a US military base.
We will also be applying a 10% tax on imports from Heard and McDonald Islands.
Here is the largest settlement I’ve managed to find on any of the islands making up Heard and McDonald:
Heard and McDonald Islands are uninhabited islands in the Antarctic, unless you’re counting penguins. Today the United States announced goods from these islands will be taxed.
The Cocos Islands will be receiving a lower tariff rate than Australia, the country which administers them. Again, I suspect this is because they simply pulled up a list of territories without bothering to look up what those territories are. But this is great news for the… 593 people who live there, in case they want to export things to the United States.
We went the other way with Reunion island. France administers Reunion and will only be receiving a 20% tariff. Reunion on the other hand is getting hit with a 37% tariff.
Nauru is getting hit with a 30% tariff. The United States imports less than $2 million in goods from Nauru. I have been to concerts with more attendees than live on Nauru.
The president is invoking “emergency” powers for all of these as once again, taxes and spending are set by Congress, not by the president. The Senate voted tonight to revoke those emergency powers. I have no expectations the House will follow suit, but as these actions have a high chance of destabilizing the global economy, know that the blame solely lies with Donald Trump and his Congressional enablers. They can stop this at any point.
In the meantime, I hope you enjoy how fundamentally incompetent all of this is. Given the discrepancies between territories and their parent countries, it’s my belief this list was entirely automated without even a moment of human review.
Which is how they think the entire government should be run.
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