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A Scaled Tariff would Help Balance the 2011 Budget - we're published in today's American Thinker
Howard Richman, 1/9/2011

We begin:

The last Congress passed a dangerous mixture of spending increases and tax cuts financed by borrowing. The American people saw this as a mistake and in the 2010 elections elected a Republican House of Representatives and an increased number of Republican senators. In the exit polls, 40 percent of voters said that the highest priority should be reducing the budget deficit (65 percent of them voted Republican). As a result, the Republicans were given a mandate to balance the federal government budget.

But the United States faces not only a huge budget deficit, but also a huge foreign trade deficit. A December 2010 National Review/Allstate Heartland Poll contained an extensive battery of questions on trade and U.S. manufacturing. The poll revealed strong public majorities in favor of a variety of measures that would move trade towards balance. For example, 68 percent of respondents supported a policy requiring that "a certain percentage of every high-end manufactured product, such as automobiles, heavy machinery, and transportation equipment, sold in the U.S. also be produced or assembled within the U.S., even if that means higher prices for their products." In 2006 and 2008, the Democrats won elections by advocating protectionism. The conservative pro-free-market alternative is balanced trade. When trade again becomes a dominant issue, Republicans could go back to minority status unless they address the trade issue themselves.

The two deficits -- budget and trade -- are easier to balance simultaneously than to balance separately. Balancing budgets reduces demand for American products, but balancing trade increases it. Balancing trade increases long-term interest rates, but balancing budgets reduces them. Moreover, the government revenue from tariffs that balance trade would help balance budgets!...

 Follow the following link to read the rest:

http://www.americanthinker.com/2011/01/a_scaled_tariff_would_help_bal.html

Comment by Stu707, 1/10/2011:

Would scaled tarrifs imposed on imports from Canada and Mexico violate NAFTA?

Response to this comment by Howard Richman, 1/11/2011:
The scaled tariff would not be applied to Canadian goods because we don't have a large enough trade deficit (goods plus services) to cause it to be applied. Mexico recently placed tariffs on 99 different categories of U.S. products including a 25% duty on U.S. cheese, a 20% duty on U.S. wine, 15% duties on U.S. fruit and fruit juices, 15% duties on U.S. pencils and pens, 10% duties on U.S. shampoo, hair spray, tooth paste and deodorant, and 10% duties on U.S. dog and cat food. If they can place tariffs on our products, we can do so on theirs. For more on this topic, see my January 5 2011 posting (The North American Unilateral Free Trade Agreement)

Response to this comment by Jim Eckland, 1/12/2011:
Mexico and Canada both rebate VAT Taxes on American Goods which act as a Tariff. Why shouldn't we compensate for that ?

Comment by Brooke, 1/28/2011:

"Mexico and Canada both rebate VAT Taxes on American Goods which act as a Tariff. Why shouldn't we compensate for that?" 

Please explain what the above means in plain English? How do Canada and Mexico impose VAT taxes on American goods? Who do they give rebates to? Is VAT a tariff? Who compensates who?

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