To: Roger
From: Jim Berger
Date: February 4, 2025
Subject: Tariffs

A lot of chatter has developed around Donald Trump’s tariff strategy. There seem to be a lot of people who are in favor of using tariffs as a negotiating strategy and a lot of people who think it’s a bad idea. Chuck Schumer tried to illustrate, by holding up a beer can and an avocado, the increases in prices. He’s an absolute clown, but he does have a point.

A tariff, without question, amounts to a tax, and consumers ultimately pay all taxes.

As you well know, I believe taxes are always a bad idea. That belief goes along with my idea that governments, in general, or a bad idea. Ludwig von Mises famously said (and I paraphrase), “Government is the negation of liberty.” Governments exist to force people to do things that they wouldn’t do on their own volition. Taxes simply amount to a way to finance this enforcement. (Maybe I will expand on this point in one of my future Language and Logic publications.)

If you believe that we need a government of any size, taxation becomes almost inevitable. Taxes become a way to finance the constitutional mandates of protecting the border in people’s personal property. Tariffs were used for a long time as a primary source of government revenue to finance the quote at the time was a limited government. Since the implementation of the income tax, government and taxation have risen in tandem.

I present here a list of some of the ramifications of implementing tariffs on top of existing taxes:

• Consumers ultimately pay all taxes. By implementing tariffs, the government punishes consumers to achieve strategic objectives.
• Given sufficient time, producers and consumers can adjust their behavior to existing taxes. When faced with the threat of taxes, neither producers nor consumers know how to adjust their behavior.
• If Trump believes that other countries are ripping us off, he should ask himself why businesses in other countries can sell their products in this country when American producers cannot. Just taxation and regulation in this country make some products noncompetitive.

I need to give a lot more thought to expressing the problems with tariffs. After I do, I will publish a more organized article in Language and Logic.

Well, Roger, I have made this memo a bit longer than I intended. Have fun, and you will hear from me later.