President-elect Donald Trump is threatening heavy taxes as retribution for U.S. companies that move their business operations overseas and still try to sell their product to Americans.
In a series of early-morning tweets Sunday, Trump vowed a 35 percent tax on products sold inside the U.S. by any business that fired American workers and built a new factory or plant in another country.
Is it morally right for Donald Trump to threaten higher taxes against companies who choose to do business overseas? Absolutely not. Is it Constitutionally permitted? Not a chance, not if the concepts of individual rights and limited federal government intervention mean anything. Is it economically sound? Absolutely not. Companies doing business overseas make that choice because it enhances their profits and pleases the people who buy their products or services. It never harms the American economy for an American business to become more profitable, so long as the profit does not come from fraud.
Trump’s proposal to tax businesses 35 percent more for hiring overseas is economic interventionism of the kind we’ve seen before. Economic interventionism is wrong no matter who does it. It fails every time it’s tried because government authorities cannot and will not ever have the capacity to make economic decisions best suited for a company. Only the company can, listening to the signals of profit and loss ultimately determined by customers.
You might have thought that as a businessman, Donald Trump understands this. When it comes to cutting taxes and regulations, assuming he means to do so, then the economy will respond in a positive way. And tax cuts and regulations would never, ever have happened under a Hillary Clinton administration, any more than they did under the Obama administration.
Throughout his campaign, Donald Trump often pointed out that America has to start “getting smart.” There’s nothing smart about economic fascism, which has been described as socialism for the right wing. Government’s sole function is to get the hell out of the way, while protecting private property rights and upholding contracts. Government is a policeman, nothing more and nothing less. When will Republicans and Democrats ever get this through their thick, politicized skulls?
Donald Trump, Barack Obama, all of you: Get the hell out of the way. Chances are that with massively reduced taxes, union wage labor laws reduced or eliminated, and many other regulations reduced or eliminated, many businesses will voluntarily change their minds about where to locate. But punishing them even further with threats of 35 percent tax hikes will do nothing but make a bad situation worse, kind of like Obamacare did to health care.
We have to count on Congress to stop this, because President Trump cannot pull this off unilaterally. I’m hopeful that a coalition of chronically partisan Democrats and authentically free market Republicans will be enough to stop him on this one.
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