Tariffs, Taxes, the Fed, and the Public Sector

The American people need to break the federal government's chains

(I am contemplating forming an exploratory committee to seek the GOP 2028 presidential nomination. I have contacted numerous long time friends and new friends and the consensus has been, Why not? A majority of the American people polled believe the country is on the wrong track. We need a “reset.” I believe I could be the change agent to restore the American republic. I therefore would appreciate your feedback regarding my forming a presidential exploratory committee. Thank you.)

Please help me reach the goal of 100,000 subscribers by January 1, 2026. Please forward this post to family, friends, colleagues, and neighbors. The goal is to help spread the ideas of peace, economic freedom, and civil liberties.

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One of the reasons the US has a powerful economic engine is we have the largest free trade geographic region in the world. Make no mistake about it, managed trade by the states—or by the federal government— would have held back economic growth. By the same token, international free trade would increase prosperity.

Tariffs, managed trade, and quotas, lower the living standards of the people in every country where national governments impose their wills on the public’s right to trade with their foreign neighbors.

In short, trade is a universal human right.

Trump’s new tariffs/tax will hurt low and middle income Americans. This is an incontrovertible fact. . This is not America First, but filling the coffers of the federal government with the American people’s money.

Foreigners do not pay American tariffs, US based companies pay tariffs.

Economist John Lott asserts the tariffs have been benign so far. The operative term is “so far.” We will see how higher tariffs impact the American economy in the months and years ahead. If US based businesses can navigate the higher tariffs without adversely their bottom lines, then the impact will be marginal.

Lott makes another point that needs to be addressed. Tariffs are taxes and all taxes distort the economy and lower living standards. He writes:

But every tax, including sales taxes and income taxes, discourages trade, distorts production and reduces growth.

Sales taxes lower consumption.

Income taxes discourage work. Corporate taxes deter investment.

All taxes distort the economy — tariffs are no exception.

That’s why I wrote Tax Free 2000, a roadmap for a tax free America in the 21st century.

One of the possible unintended consequences of higher tariffs could be lower quality products being substituted for current imports. Time will tell if foreign companies reduce their production costs with cheaper inputs therefore allowing them to reduce their prices to American businesses so higher tariffs would have virtually no price impact for US companies and consumers.

As far as the Federal Reserve’s perspective on tariffs, Donald Luskin criticizes the Fed for not taking into account past tax hikes in their interest rate decisions. Chairman Powell asserts the uncertainty of higher tariffs on prices has not allowed the Fed to lower the fed funds rate—the rate the central bank manipulates as part of their tools to “manage” the US economy.

The Fed should not be manipulating interest rates. Interest rates should be determined by financial market participants. In other words, supply and demand must determine all prices, include the price of borrowing money.

(See the Mises Institute’s documentary, Playing With Fire, for a comprehensive critique of the Fed’s manipulations and money printing.)

In the final analysis, taxes/tariffs are all about government spending. That’s why Murray Rothbard’s essay about the public sector lays to rest the need for a large public sector—that is, big government.

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Two new essays have been published about MAFI and its historical significance.

Stars of Entrepreneurship:
https://starsofentrepreneurship.com/from-professor-to-public-advocate-how-murray-sabrin-is-fighting-for-financial-freedom/

Moguls of Business:
https://mogulsofbusiness.com/murray-sabrins-financial-rebellion-the-movement-to-end-taxes-and-empower-charity/

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The MAFI Collection is coming this month.

Get ready to order the baseball cap to enlist in the financial independence movement.

My essay on financial independence and a constitutional federal budget.

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Please forward this post to your network, list, etc. The more people learn about MAFI, the sooner we can achieve financial independence and restore the republic.

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Murray Sabrin, PhD, is emeritus professor of finance, Ramapo College of New Jersey. Dr. Sabrin is considered a “public intellectual” for writing about the economy in scholarly and popular publications. His book, The Finance of Health Care: Wellness and Innovative Approaches to Employee Medical Insurance (Business Expert Press, Oct. 24, 2022), and his other BEP publication, Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide (October 2021), provides decision makers with tools needed to help manage their businesses during the business cycle. Sabrin's autobiography, From Immigrant to Public Intellectual: An American Story, was published in November, 2022. He is also the author of Why the Federal Reserve Sucks.