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President Donald Trump on Tuesday announced his decision to create a new government agency to collect taxes and tariffs from foreign countries. ‘I am today announcing that I will create the EXTERNAL REVENUE SERVICE to collect our Tariffs, Duties, and all Revenue that come from Foreign sources,’ Trump wrote on social media.
Trump argued that the United States government had relied too much on taxing Americans for revenue, specifically pointing to the much-loathed Internal Revenue Service (IRS) efforts to collect more taxes. ‘Through soft and pathetically weak Trade agreements, the American Economy has delivered growth and prosperity to the World, while taxing ourselves. It is time for that to change,’ he wrote.
Currently the United States Customs and Border Protection (CBP) collects tariffs, so any new agency would have to reorganize the current system. The president-elect’s statement will likely have an impact on the Senate confirmation hearings of his economic cabinet picks, as Senators will want a thorough explaining of his thinking on the issue.
Trump appears to be making his announcement to emphasize the amount of money the United States can collect from foreign countries on trade. ‘We will begin charging those that make money off of us with Trade, and they will start paying,’ he wrote. ‘FINALLY, their fair share.’ Trump indicated he would create the new agency on his first day as president.
For years, Trump has adamantly campaigned on the issue of raising tariffs on foreign goods coming into the United States, even as producers warn him away from sparking a trade war . Trump has proposed a widespread 10 percent tariff on global imports to raise revenue for the United States. He also views tariffs as an ecumenic weapon, as he has threatened China with tariffs as high as 60 percent if they do not do more to reduct the amount of fentanyl flowing into the United States through Mexico.
Trump has also proposed higher tariffs on Mexico and Canada, if they do not do more to reduce the number of drugs and migrants coming across the border . He has only escalated his tariff proposals since the election, even suggesting that Canada join the United States as the 51st state to avoid higher charges on their imported goods.
‘I am a Tariff Man,’ he wrote in 2018. ‘When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so.’ If Trump had his way, it is likely he would eliminate income taxes altogether. During the campaign, Trump promised to end all kinds of taxes including taxes on tips, social security benefits, and overtime pay .
‘When we were a smart country, in the 1890s … this is when the country was relatively the richest it ever was. It had all tariffs. It didn’t have an income tax,’ he said during a meeting with barbers in New York City in October. When he was asked about the proposal during an interview with podcaster Joe Rogan, Trump indicated he was serious. ‘Yeah, sure. Why not?’ he replied when asked by Rogan about the idea.
Trump cited the 25th president of the United States William McKinley’s views endorsing tariffs, calling him the ‘tariff king’ who ‘spoke beautifully of tariffs.’ ‘Around in the early 1900s, they switched over stupidly to frankly an income tax,’ he continued. ‘And you know why? Because countries were putting a lot of pressure on America.’
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