Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

Trade Deficits Are Taxes on American Workers Levied by Foreign Countries
Raymond Richman, 6/18/2019

The media are all trumping that Pres. Trump’s tariffs are a tax on American consumers and favor free trade. They are telling less than half the story. The chronic trade deficits are also a tax on American workers. The chronic trade deficits tells us that foreign countries are shipping to us more goods at current exchange rates than we are shipping to them. They are accumulating the difference in US cash, bonds or notes or existing productive assets like real estate or private securities. They are not buying newly produced goods or services which require labor to produce. The workers who lose their jobs have to seek lower paying jobs in the US domestic market.

The American consumers are for the most part salary and wage workers. The trade deficits eliminated the jobs of millions of American manufacturing workers who found continued employment only in lower wage domestic jobs. Many multinationals have been producing products abroad and selling most of their output in the US producing huge deficits with China, Germany, Japan, Mexico, S. Korea, and others. Santa Monica, California once had hundreds of manufacturing jobs creating products for Apple Corp. Its principle product now is produced by Foxconn, a Chinese company, in China.

It is true that the laid off workers found jobs eventually but at much lower wages. This is the excuse for the widespread economic belief that trade deficits do not cause permanent unemployment. The difference between the wages before and after a trade deficit has all the characteristics of an income tax, leaving the worker-taxpayer with less after-tax income to consume or save. Chronic trade deficits may not cause unemployment in the long-run as many economists argue but millions of manufacturing workers lost well-paid jobs as a result of the trade deficits and ended up considerably poorer. ...


Comments: 2

Trade Agreements Are "Entangling Alliances" That Are Difficult to Exit Once They Are Approved.
Raymond Richman, 6/2/2019

Pres. Thomas Jefferson, in his inaugural address, declared his devotion to "peace, commerce, and honest friendship with all nations, entangling alliances with none", using a phrase which is often attributed to Pres. Washington. warned against entangling alliances. He thought they could involve us in wars that we did not want to fight. e thoushht An exTple of an entangling alliance is the European Union and the difficulty the UK is experiencing to make a British exit from it. Multil­ateral trade agreements are eThe USA took advantage of its success in breaking up the USSR by getting some former members of the USSR to join the North Atlantic Treaty organization (NATO). It waged war against Yugoslavia and got Albania, Croatia, and Slovenia to join the European Union and NATO. ntangling alliances which become the law of the land even superseding the Constitution. The General Agreement on Tariffs and Trade created the World Trade Organization. The GATT agreement that it administers has a provision that members shall not require the country of origin to appear on the sales of imported products. The U.S. Congress passed a law requiring labeling meat products with the country of origin. The WTO warned the U.S. Congress that that was in violation of the treaty. The U.S. Congress dutifully rescinded the labeling requirement.

It is amusing to observe the leaders of theThom Democratic Party pretend to be upset about an alleged Russian interference in the 2016 USA presidential election and argue that it smacks of collusion. They object not at all to USA intervention in Venezuela or to the inclusion in NATO of former Russian dominated countries, ...


Comments: 0

  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    May 2021
    Apr 2021
    Feb 2021
    Jan 2021
    Dec 2020
    Nov 2020
    Oct 2020
    Jul 2020
    Jun 2020
    May 2020
    Apr 2020
    Mar 2020
    Dec 2019
    Nov 2019
    Oct 2019
    Sep 2019
    Aug 2019
    Jun 2019

    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term
    Economy - Short Term
    Environmental Regulation
    Real Estate Taxation

    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • Votersway Blog
  • Watt's Up With That


  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]