A Better Tax

Tariffs are a superior alternative to the current tax system.

The three central sections of this post explain why and how.

• Internal vs. External

• $4$

• Getting There from Here

  
  

First, lets visualize the American Tax Revenue framework in a classic 2x2 matrix.

Enjoy.

American Tax Revenue — 2x2 Matrix

Click REFRESH to see Tariffs supplant Income Taxes over time.

This assessment matrix positions External Taxes in the top row, with Internal Taxes in the bottom row. Income & Asset Taxes are in column one, Sales Taxes in column two.

Today's tax regime in America is almost completely internal, consigned to the bottom row. Federal and state taxes wallow in the bottom-left quadrant, including Income Taxes of all forms, Death Taxes and Property Taxes, that staple of counties and school districts. Speaking of staple taxes, sales taxes on retail items are a municipal staple, driving up the price at the pump, the cost of clothes at the mall, new tires for the car, and pretty much everything else.

External taxes are mostly tariffs and their like, e.g., VATs on imports. Tariffs occupy the top-right quadrant since they are External Sales Taxes. Sales Taxes are superior to Income and Asset Taxes because they are triggered by consensual transactions, thus affording more control to buyers than do taxes imposed on incomes or assets. That increased control over personal financial power increases Burkean Brainpower, more about which shortly.

The animated GIF above progresses from the last full Biden-Harris year of 2024 to the first full year of President Lara Trump's initial term in 2029. Across those six years, tariffs will grow from a pittance into a giant windfall, while income taxes will drop precipitously as a result.

Now, on to examining how America taxes itself.

Internal vs External

Nations can tax their economies in two ways: internally or externally.

Internal taxation at the federal level primarily involves income & asset taxes. Income taxes tax earned income, passive income, capital gains and more, afflicting both individuals and businesses. Asset taxes include property and estate taxes, aka Death Taxes. Plus, state and local governments impose sales taxes at retail and transfer taxes on the sale of real estate.

External taxation, by contrast, focuses on sales taxes applied to imports—tariffs.

Critics of tariffs argue they’re harmful because they function as a sales tax. This misses the point. The critical distinction isn’t the type of tax but its source. Internal taxes burden American citizens and domestic businesses. External taxes, while collected by importers, shift the burden mostly to foreign entities. The key question is: Internal or external taxation?

The answer is clear: External Taxation is better. It allows Americans—individuals and businesses alike—to retain greater control over their financial power. That makes people happier, plus fosters broad success, innovation and efficiency. This approach unleashes what can be called Burkean Brainpower, when the IQs of millions of individuals control more of their personal financial power. Result? Vastly greater wealth and prosperity in America.

Today, the Internal Revenue Service collects internal taxes, as it has for over a century. Everyone hates the IRS. It's unAmerican not to. Professional Democrats don't get that.

Imagine, instead, an External Revenue Service collecting tariffs and distributing that external revenue to Americans, in America, to us. The ERS will be the first federal agency universally beloved by the American people, a taxing agency at that. Hell of a thing.

Such a system will maximize Burkean Brainpower and drive America’s Golden Age.

$4$

Every dollar of tariff revenue must supplant one dollar of income tax—dollar for dollar, or $4$. And/or tariff revenue can go towards America's $36 trillion debt. These alternatives ensure that every dollar collected through tariffs increases Americans’ after-tax income.

As a result, Americans will have more disposable income to handle any potential rise in import prices. Further, external taxation will stimulate increased domestic production. By 2029, many goods currently imported will be Made in America, bought by flush Americans.

The result? More4More, a more prosperous economy that benefits more Americans.

Getting There From Here

Transitioning to an external tax system is no small feat, to put it mildly. It requires dismantling the entrenched internal tax regime that Americans have endured for over a century AND restructuring the global trading system.

That's all, just reengineer our dysfunctional, yet long established, tax system! Everything from TurboTax to the tax avoidance industry is based it. Plus, restructure the world's trading system! Hercules cleaning the Augean Stables comes to mind as a comparable challenge.

Given that America is the world’s richest market and a major economic producer, the transition to tariffs could be the most significant economic restructuring in history.

Skeptics, including economists and pundits, claim this a transition too far. They’re wrong.

President Donald J. Trump’s uncanny vision, heroic resolve and extraordinary executive skills make this transformation not only possible but likely. Despite alarmist reactions from Wall Street bankers and mainstream media outlets, like the antiTrump Wall Street Journal, Trump is executing like clock-work, with early developments forming up just as he must desire.

In particular, his Art of the Deal gambit of worldwide tariffs have most every country in the world begging Washington for a deal. The offers they proffer must satisfy Donald J. Trump, a golden president for the American Golden Age. His America First savvy is ideal for the job.

That said, the Liberation Day launch and subsequent White House communications have been far from perfect. For instance, they've yet to clearly articulate, let alone reinforce, the $4$ rule described above. On a related note, the President's proposed tax reform remains months way. Given the $4$ rule, that tax reform should include tax cuts paid for by tariffs.

However, anyone who has experienced a major restructuring knows that miscommunications and recalibrations are par for the course. This one is no different, just bigger, much bigger.

Bottom Line

We've reached the end of the beginning, with the great game off to a grand start.

Winning is entirely probable.

God bless America!