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Paul Krugman@pkrugman.bsky.social |
Imports are about 14 percent of US GDP. Federal income tax revenue (not including payroll taxes) is about 8 %. So you might think replacing it would require a tariff rate of 8/14 or around 57 percent. But ... 2/
1 replies 5 reposts 42 likes
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Paul Krugman
@pkrugman.bsky.social
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Tariffs would raise the cost of imports to consumers, so we'd import less, which would mean you need a higher tariff rate. But this reduces imports further, meaning a still higher tariff, and so on 3/
2 replies 6 reposts 34 likes