We’re not sure what to make of Donald Trump’s whimsical comment that he would like to use tariffs to replace income taxes. We’re undecided on the wisdom of the proposal, but a few things to consider:

• • • Tariffs were the number one source of revenues for the federal government.  Then, the U.S. made one of its most grievous errors in history by adopting an income tax in 1913 via the 16th Amendment (which should be repealed).

The idea of replacing the evil progressive income tax with rates that exceed 40% and at one point reached 91%, and replacing it with a 10% flat income tax, would be pro-growth.

• • • Tariffs are taxes on consumption. It is better to tax consumption than to tax saving and investment.
    • Tariffs are, of course, taxes but a non-discriminatory revenue tariff on everything is far better than protectionist tariffs that try to prop up industry – cars, steel, solar panels, batteries, etc.
    • We import nearly $4 trillion a year, so a 10% tariff could raise as much as $400 billion. That’s enough to completely replace what the corporate tax was raising before the Trump tax cuts.

It’s a good debate to have. There are many arguments AGAINST this idea. And we’re sure we will be hearing from readers enumerating what those are. We’re all ears.