Taxation Through Trump's Tariffs | This Week's Economy Ep. 97
Trump reveals his tariff plans, experts demand CFPB be abolished, and more.
Hello Friends!
Major changes are underway in the federal government with President Trump in office. He appears to be tackling the size and scope of government, which is a long overdue move. We’re also gaining more insight into his plans to impose tariffs, which could raise American prices. Now is the time for bold reforms—whether it’s slashing government spending, championing free markets, or encouraging innovation to maintain our global competitiveness.
In this episode and show notes below, I explore the latest Trump efforts based on my time in the first Trump White House OMB . I also examine a Texas school choice bill, a new competitor in the AI sector, calls to abolish the CFPB, and much more. Tune in on YouTube, Apple Podcast, or Spotify, and visit my website for more information.
1. TRUMP TARIFFS TAX AMERICANS
In the News:
During a recent address to House Republicans, Trump outlined his approach to tariffs, emphasizing that businesses must build in the U.S. to avoid paying taxes or tariffs. He also mentioned that he would start with high-profile industries, such as pharmaceuticals, steel, and technology, gradually expanding these measures over time. Source: CNN
My Take:
Tax on Americans: Tariffs effectively tax American consumers, raising the prices of goods and putting additional strain on households already grappling with inflation. This policy is a costly mistake that harms Americans and undermines long-term economic growth. Government-imposed protectionism distorts markets, reduces competition, and forces consumers to pay more for goods.
Supporting American Businesses: Rather than relying on tariffs, the best way to help American businesses and families is by reducing excessive government spending, fueling inflation created by the Fed. Policies that cut regulatory burdens and promote free trade are more effective at helping businesses thrive and grow.
Better Solution: Instead of implementing these protectionist measures, President Trump should focus on reducing government spending, cutting taxes, and eliminating unnecessary regulations. By promoting free markets and global trade, we can foster innovation, economic growth, and prosperity for Americans and international trading partners.
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2. TEXAS DEBATES SCHOOL CHOICE
In the News:
The Texas Senate Committee on Education K-16 quickly passed Senate Bill 2, which would introduce universal school choice for Texas students. If passed, the bill would establish Education Savings Accounts (ESAs), providing $10,000 per student for private or charter school tuition. It could be up for a vote in the full Senate soon. Sources: The Texan
My Take:
Empowering Families with ESAs: The current public school system fails too many students. ESAs empower families to allocate education funds toward schools or programs that best meet their child’s needs.
Budgeted ESAs: With a $1B budget, the program could offer $10,000 ESAs to approximately 95,000 students, or about 1.5% of Texas' 6.3 million school-age children. While this is an improvement over previous attempts (which would have reached just 62,000 students), it’s still insufficient to fully meet the demand. If the bill is universal, it should remove barriers to eligibility and those “strings” often associated with such programs.
A Better Path for School Choice: The best way to implement ESAs is to let parents decide where to send their children. Taxpayer dollars should follow the student, not the school. If a child leaves the public school system, funding should follow them — since the school now has fewer students and doesn’t need additional resources.
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3. GRIND GOVERNMENT TO A HALT
In the News:
President Trump’s recent Executive Orders have sent shockwaves through the federal government, leading to rescinded job offers and a disruption of business as usual. Sources: Wall Street Journal
My Take:
A Long-Needed Shake-Up: The federal government has expanded its size and scope. A shake-up like this is overdue and essential for driving meaningful change.
Rein in Spending: With the national debt now at $36 trillion and projected to rise further, drastic measures are needed. This disruption could catalyze much-needed cost-cutting, vital to addressing mounting issues like inflation.
DOGE and Future Reforms: For reforms to be truly effective, DOGE must establish clear, measurable targets for cost reduction. This includes tackling the hidden costs of excessive regulations. By taking a focused, data-driven approach, and with President Trump’s backing and use of his "bully pulpit," DOGE has the potential to deliver actual savings and improved government efficiency.
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4. ABOLISH THE CFPB
In the News:
The Consumer Financial Protection Bureau operates with little accountability, funds itself unilaterally, and enforces regulations based on its consumer behavior theories. Many experts are calling for the abolishment of this government agency and asking the Trump administration to take a closer look. Sources: National Review and Reason Magazine
My Take:
Troubling Regulations: The CFPB has issued many troubling regulations that have worsened situations for American families. Some recent worrying regulations are Section 1033 and the bar on medical debt from factoring into credit scores. The CFPB has been a detriment to consumers and the economy, especially with its woke nonsense.
Independent Funding: This agency lurks in the darkness, as the public-private Federal Reserve funds it at $600 million annually, even as the Fed is running losses. This is outside the power of the purse by Congress, which is unlike most federal agencies.
Abolish the CFPB: Congress should file a bill to end the CFPB. The best determinant of what’s valuable to consumers is the marketplace, which is hindered by the CFPB, thereby noting how this rogue agency with funding from the broke Fed should not exist, and Congress should end it.
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5. DEEPSEEK AI UPENDS THE STOCK MARKET
In the News:
Chinese startup DeepSeek AI's assistant became the top downloaded free app on Apple’s iPhone store last week. The Nasdaq fell 3%, with NVIDIA losing $600 billion in market value, after DeepSeek AI unveiled its cutting-edge generative AI, sending shockwaves through global tech markets. This surge has raised concerns among U.S. tech industry observers, who worry that the Chinese company has caught up with American leaders in generative AI at a fraction of the cost. Sources: The Associated Press
My Take:
Give Consumers Choice: We need more competition to drive higher-quality products. While this may have been a short-term fluctuation in the market, it’s likely to correct over time. However, the landscape could shift further as competition in AI continues to grow.
Why America Must Lead: AI can potentially spark a new economic revolution. To stay competitive globally, the U.S. must continue leading in AI innovation, ensuring that markets foster technological progress that drives productivity and economic growth.
The Path Forward: America should rely on market forces to push AI progress forward rather than stifling innovation with overbearing regulation. At the same time, we must uphold a consumer welfare standard that prioritizes efficiency, innovation, and tangible benefits for consumers. (Read my latest research here)
Related:
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God bless you, and let people prosper!
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