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The wall will be built by hook or by crook as the saying goes. And it seems that President Trump is determined to make it so.
President Trump will ask Congress to impose a 20 percent tax on all imports from Mexico to pay for a wall along the United States’ southern border, the White House said Thursday.
White House press secretary Sean Spicer did not give out specific details about the new tax or explain how it would be implemented, but he said it could be included in a comprehensive tax reform package.
Wow, that’s quite the negotiating tactic! One that, as of late yesterday, sent everyone into a tizzy.
Spicer told reporters aboard Air Force One the tax would raise $10 billion a year for a wall that is expected to cost between $8 billion and $20 billion.
Perfect! That’ll raise quite a bit of money in addition to that which was earmarked by Congress during the Bush Administration. All of this seems like a good idea right? Well…it is and it isn’t.
It is, in that President Trump is working to fulfill one of his campaign promises. Quite frankly, the border is a sieve and has caused massive problems for years. Is the wall THE solution to that? It remains to be seen.
On the other hand, this tax isn’t a good idea. Why? The law of unintended consequences.
Let's all be clear when discussing Trump's 20% tax we are talking about a massive new tax on fruits and vegetables. https://t.co/NE1qQQnOl9
— Lisa Bloom (@LisaBloom) January 26, 2017
You know, she’s correct. In fact, Mexico is one of the top 5 importers of food into the United States. Heck, this week alone I’ve included avocados, pine nuts, and peppers in my meals!
Needless to say, lawmakers and the President need to be very cognizant of this should they decide to move forward with the 20% tax idea. Why?
It’s called trickle down economics. If a 20% tax is imposed, it will affect every industry tied to the import of fruits and vegetables including restaurants, truckers, consumers, and grocery stores.
How? Say for instance that a grocery store chain buys avocados at $.65 per. The cost to move them from Mexico to the U.S. is another $.5. Add another $.10 to transport to their stores. Total is $.80 per avocado. Factor in another $.20 in regards to import fees along with overhead and the cost to the grocery store is at least $1 per avocado. In order to recoup that cost and make any kind of profit they realistically need to charge more. I purchased ours at a cost of 3 for $5 the other day, in other words $1.66 per avocado. If the tax does see the light of day, its likely that costs across the board will go up to recoup that 20% increase.
Lets take a look again at what Sean Spicer said
First of all, this is one of a plethora of ideas. Secondly, the Administration is taking a look at import regulations of other countries to determine what is or isn’t feasible. Third, this isn’t the only idea that is on the table. But again, any idea needs to be looked at carefully and in depth before moving forward.
Border security yes, tariffs no. Mexico is 3rd largest trading partner. Any tariff we can levy they can levy. Huge barrier to econ growth /1
— Lindsey Graham (@LindseyGrahamSC) January 26, 2017
Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad. (2)
— Lindsey Graham (@LindseyGrahamSC) January 26, 2017
Believe it or not, the Senator has a point! And no, I’m not talking about the beer, margaritas, and guacamole – although that’s good stuff! What I’m talking about is border security, how to beef it up and how to stem the tide of illegal immigration into this country. There are a lot of ideas out there, this import tax for the wall is one. However, lets take an in-depth look before we leap shall we?
Easiest method would be to tax renumerations from non-citizens to Mexico and points south. IOW, make the illegal aliens pay for it. (Yes, it will impact legal immigrants, too; but the vast flow of money south is one of the large negative impacts of the illegal alien problem.)
Exactly the point I was going to make. This will also put a significant dent in their GDP.
Maybe just on durable goods. Then manufacturers will relocate to the US?
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