Just some thoughts in case what I’m hearing on reddit is wrong.
I like the idea of a VAT tax as a way to provide income to states instead of an income tax. It probably has its downsides but Europe manages it quite well.
I get the feeling that Trump wants us to be more like some parts of the German economy. Population in the low hundred millions, mix of manufacturing and consumer economy, top of the line reserve status (Euro is just behind the Dollar and wouldn’t shift much economically if it took over), federated states with hubs or centers for specific economic activities.
Tarrifs add costs to consumers, whether it’s manufacturers buying from other suppliers or people buying for their home improvement. Since the US is unique in that it’s primarily consumption based, it would mean a one time increase in prices that would shift the tax burden from the wealthy to products.
The effect on stocks should be minimal since tech drives growth and doesn’t rely on physical products as much (unless of course, AI).
And less taxes for the wealthy and corporations means they stay here and make high income jobs so that the upper-middle class can continue providing the bulk of the tax revenue. Basically, this decouples reliance on the wealthy, or corps, but puts focus back on tax revenue from the masses and tarrifs, since we have the money to buy foreign products. Even if the US dollar declined 20% or so percent, we’d be competitive with Europe and would still be able to buy the majority of our products from developing economies.
Am I getting this right?