Brownstone Institute
Trump’s 19th-Century Solution to Fiscal Disaster

From the Brownstone Institute
By
In the last weeks of the campaign, Donald Trump is slicing and dicing the Federal income tax nearly as fast as he served up fries at the McDonald’s drive-thru window last weekend. So far, he has proposed to extend the lower rates, family tax credits, and investment incentives of the 2017 Tax Act after they expire in 2025 and to also exempt tips, Social Security benefits, and overtime wages from the Federal income tax.
Those items alone would generate a revenue loss of $9 trillion over the next decade, but he has recently proposed to also exempt firefighters, police officers, military personnel, and veterans from the Federal income tax as well.
We estimate the latter would cost another $2.5 trillion in revenue loss over 10 years. As it happens, there are 370,000 firemen, 708,000 policemen, 2.86 million uniformed military personnel, and 18.0 million veterans in the US. These 22 million citizens have an estimated average income of $82,000 per year, which translates to about $60,000 each of AGI (adjusted gross income). At an average income tax rate of 14.7% these exclusions would generate $250 billion per year of reduced income tax payments.
In all, Trump has thus tossed out promises to cut income taxes by $11.5 trillion over the next 10-year budget window. In turn, these sweeping reductions would amount to upwards of 34% of CBO’s estimated baseline income tax revenue of $33.7 trillion over the period. Alas, even in the halcyon days of Reagan supply-side tax cutting no one really dreamed of eliminating fully one-third of the so-called crime of 1913 (the 16th Amendment which enabled the income tax).
10-Year Revenue Loss:
- Extend the 2017 Trump tax cuts: $5.350 trillion.
- Exempt overtime income: $2.000 trillion.
- End Taxation of Social Security benefits: $1.300 trillion.
- Exempt Tip income: $300 billion.
- Exempt Income of Firemen, Policemen, Military and Veterans: $2.500 trillion.
- Trump Total Revenue Loss: $11.500 trillion.
- CBO Income Tax Baseline Revenue: $33.700 trillion.
- Trump Revenue Loss As % of Baseline: 34%.
Then again, Trump may have something virtually epic in mind. To wit, scrapping the income tax entirely in favor of taxing consumption via levies on imported goods and merchandise.
“In the old days when we were smart, when we were a smart country, in the 1890s and all, this is when the country was relatively the richest it ever was. It had all tariffs. It didn’t have an income tax,” Trump said at a sit-down with voters in New York on Friday for Fox & Friends.
“Now we have income taxes, and we have people that are dying.”
The New York Times is deeply alarmed: “The former president has repeatedly praised a period in American history when there was no income tax, and the country relied on tariffs to fund the government.”
Actually, however, 19th-century America was even smarter than Trump realizes. In 1900 total Federal spending amounted to just 3.5% of GDP because back then America was still a peaceful republic and had no Warfare State or even significant standing army at all. And save for the most advanced precincts of Europe, the Welfare State hadn’t yet been invented, either.
So, yes, the so-called “revenue tariffs” of the 19th century did meet the income needs of the Federal government to the point of actually balancing the budget year after year between 1870 and 1900. Indeed, the actual annual surpluses were large enough to pay down most of the Civil War debt, to boot.
Today, of course, the Warfare State, Welfare State, and the Washington pork barrels account for 25% of GDP. So Trump may be directionally correct in wanting to tax consumption rather than income, but, as usual, he’s off by about seven orders of magnitude when it comes to the size of the Federal budget that needs to be financed.
Still, Trump has stepped up to the plate when it comes to a 21st-century version of the revenue tariff. He has pledged to impose a 20% universal tariff on all imports from all countries with a specific 60% rate for Chinese imports. Based on current US import levels of $3.5 trillion per year from worldwide sources and $450 billion from China, Trump’s tariffs would generate about $900 billion of receipts per annum.
To be sure, Trump’s claim that these giant tariffs would be paid for by Chinamen, Mexicans, and European socialists is just more of his standard baloney. Tariffs are paid for by consumers, but that’s actually the hidden virtue of the Tariff Man’s favorite word.
The truth is, government should be paid for via taxation on current citizens, not fobbed off in the form of giant debts on future citizens, born and unborn. So if we are going to have Big Government at 25% of GDP rather than a 19th-century government at 3.5% of GDP, and Trump is a Big Government Man if there ever was one, better that the burden be placed on consumption, not production, income, and investment.
After all, today the “makers” get hit good and hard by the current exceedingly lopsided income tax system. Thus, the top 1% pays 46% of income taxes, while the top 5% pays 66% and the top 10% pays 76% of all income taxes. On the other end, by contrast, the bottom 50% pays just 2.3% of individual income taxes, while 40% of all families pay no income tax at all.
In any event, the math works out such that the proposed Trumpian revenue tariffs would generate about $9 trillion over the next decade, or nearly 80% of the $11.5 trillion revenue loss from drastically shrinking the income tax coverage and collection rate. So that’s a big step in the direction of fiscal solvency rather than more UniParty free lunches.
To be sure, the proper redirection of Federal tax policy would be a national sales tax or VAT levy, which could be applied to both goods and services and to domestically produced output as well as to imports. Thus, a 5% VAT on the current $20 trillion per year of total PCE (personal consumption expenditures) would generate the equivalent of Trump’s revenue tariff, while a 15% levy on total PCE could replace both the Trump tariff and the remainder of the income tax entirely.
Notwithstanding its shortcomings, however, a revenue tariff is a long overdue start in the right direction. Trump’s bold stance in favor of taxing consumption rather than income and requiring all households to bear the cost of government, not just the small number of producers at the top of the economic ladder, is clearly superior to the status quo.
Still, this sweeping change in the composition and incidence of tax policy doesn’t really put the impending fiscal disaster to bed. Not by a long shot.
If you assume Trump’s big revenue tariffs and sweeping income tax cuts and that the other Federal payroll, corporate, and excise taxes remain the same, 10-year revenues compute to just $60 trillion versus built-in spending of $85 trillion per the CBO baseline. In short, even with a giant Trumpified version of the historical revenue tariff, Trump’s budget plan would still generate $25 trillion of red ink over the next decade.
10-Year Budget Outlook with Trump Tax Cuts and Tariffs, 2025 to 2034:
- Individual income taxes with Trump cuts: $22.0 trillion.
- Trump Revenue Tariffs: $9.0 trillion.
- Existing Payroll Taxes: $20.9 trillion.
- Existing Corporate Tax Ex-Trump Cut to 15% on Manufacturers: $4.6 trillion.
- Other Existing Federal Receipts: $3.5 trillion.
- Total Federal Revenue Under Trump Policy: $60.0 trillion.
- CBO Baseline Federal Outlays: $85.0 trillion.
- 10-Year Trump Deficit: $25.0 trillion.
To be sure, Trump has promised to turn Elon Musk loose on a crusade against government waste and inefficiency, and we say more power to him. If anyone has the courage and smarts to take on the Swamp, surely Elon Musk is at the top of the list.
Then again, Trump has promised to shield 82% of the budget from any cuts at all. That’s right. Elon could huff and puff and shrink the non-exempt programs and agencies by one-third and still leave deficits in excess of $20 trillion over the next decade.
10-year Cost Of Programs Trump Has Championed, Promised Not To Cut or Can’t Cut:
- Social Security: $20.0 trillion.
- Medicare: $16.0 trillion.
- Federal Military and Civilian Retirement Pensions: $2.5 trillion.
- Veterans’ programs: $3.0 trillion.
- National Security Budget: $15.5 trillion.
- Interest On the Public Debt: $13.0 trillion.
- Total Exempt Programs: $70.0 trillion.
- Exempt Programs As % of $85 trillion CBO Baseline: 82%.
In short, even with Trump’s full revenue tariffs and assuming Elon could actually slash 33% of the non-exempt budget without closing the Washington Monument, the bottom-line math leaves little to the imagination. Spending at $80 trillion would amount to 22.7% of GDP, while Trump’s tariff-heavy revenue package would generate $60 trillion of Federal receipts over the next decade, amounting to about 17.0% of GDP.
In turn, that would leave a structural deficit of nearly 6% of GDP as far as the eye can see. And that projection assumes no recession ever again and that interest on a public debt approaching $60 trillion by 2034 would average just 3.3% across the maturity spectrum.
We will take the unders on that proposition any day of the week and twice on Sunday. That is to say, CBO’s projection of $1.7 trillion of annual interest expense by 2034 is likely understated by several trillion. Per year.
In any event, the challenge of financing these giant deficits along with $900 billion per year of Trump tariffs would be considerable. The latter alone would amount to nearly 10% of annual US consumption of consumer goods and fixed investment goods.
So if the Fed were to “accommodate” these massive Trump tariffs by running the printing presses red-hot in an attempt to compensate for lost household purchasing power, it could well trigger a burst of inflation even more virulent than that of 2021-2024.
On the other hand, were it to adhere to the correct sound money solution and refuse to “accommodate” both the massive Trump deficits and the giant Trump tariffs, bond yields, and interest rates would soar, even as the Main Street economy contracted sharply in response to a one-time 10% increase in the general price level.
Financing massive budget deficits honestly in the bond pits rather than at the Fed’s printing presses would also unleash the mother of all meltdowns in today’s insanely inflated financial markets. Trump would therefore get his tariff and some substantial reshoring of industrial production, but also a hair-curling recession on Main Street and a Bronx Cheer from the canyons of Wall Street.
Unfortunately, that’s the price America would have to pay even under Trumpian economics to purge the destructive effects of decades of UniParty spend, borrow, and print policies.
Still, we can actually think of a decidedly worse scenario. To wit, perpetuation of the UniParty status quo, which is what we would get from the Washington ruling party that replaced a failing mind in the Oval Office with an empty one on the Democratic presidential ticket.
A version of this piece appeared on the author’s site.
Brownstone Institute
Counting Coup: The Great Comeuppance For The Deep State

From the Brownstone Institute
By
It is, yet again, fashionable amongst the dwindling tribe of progressives to yell loudly that what is happening now in DC is a coup.
Donald Trump (and his Muskian minions) are running roughshod over the government, destroying norms and constitutional precedents and being very rude about it in the process.
Despite being elected on a platform of doing exactly that only a few months ago, the deep and/or woke state (before woke became a cool and easy way to grift graft billions, the deep state didn’t really care about things like trans whale rights, by the way) and its well-credentialed but poorly educated horde of government job dependent supporters are crying – literally – foul.
Elon Musk is unelected. You have no right. This is not a dictatorship. How dare you change anything that has worked so well for us for decades? At least slow it down. (Note – if you really thought you were being murdered you would yell “Stop!,” not “Slow down,” so maybe even progwokes get it, at least at a subconscious level.)
This is a coup, they yell.
Well, no it’s not. The nation – eyes wide open – elected Trump to do exactly what he is doing right now, whirlwinding through federal agencies to end the generational oligarchical scam.
Note – Joe Biden theoretically was elected to bring normalcy and decency to DC only to see his administration become a corrupt cavalcade of lies. In fact, unlike Trump, Biden did exactly the opposite of what he said (or mumbled or read) during the campaign that he was going to do as president.
If a coup involves false pretense, then look no further than Delaware.
Obviously, all actual coups involve change, but not all change is by definition a coup.
The concepts are not transitive.
And everything that has been done so far is well within the purview of the president – in theory, Joe Biden could have done everything Trump is doing now, if his handlers had let him or if it had ever occurred to him to do so.
What is happening is not a coup – it’s basic reform. It’s trying to sort out the absurdities of government spending and programs and to shut down the most egregious; case in point the USAID.
Vast billions slushed through the agency (one hopes the ludicrously named, cartoonishly-villainous National Endowment for Democracy is next) under the cover of political correctness and/or expediency on its way around the globe, most of which ended up in odd pockets of strongmen and politicians and “civil society” power-base builders who would then turn around and support the agency and its many many QUANGOs and foundations and such.
The money was not about helping actual real people – it was about creating an international network that could be called upon to do the bidding of the American intelligence community and the globalist socialist socialite statists, now one and the same. When you pay people they will pay you back, however they can, from writing op-eds to going on MSNBC to railing against populism – whatever you need at the moment.
That being said, there is one possible interpretation of the idea of a coup that could have more than an element of truth to it – counting coup.
Counting coup was a Plains Indian warrior tradition in that you didn’t necessarily have to kill your opponent in a battle but merely touch them – essentially bonk them on the head – and get away unscathed. That humiliated your opponent and counted – more than counted – as a moral victory (in fact, amongst the Crow – at least – it was one of four tasks that had to be completed in order to become a war chief.)
It was bravery personified.
And it can be said that Trump, Musk, and his hyper-caffeinated hackers are doing that with every move they make – counting coup.
Millions for gender-diverse Serbians?
Bonk on the head.
Paying global media types to twist the truth to benefit the interests of the deep state, including pushing to prolong the war in Ukraine and even possibly support the impeachment of Trump?
Bonk on the head.
Trying to help overthrow foreign governments?
Bonk on the head.
Government DEI programs?
Bonk on the head.
Paying for the BBC, climate change silliness, and Iraqi puppet shows?
Bonk, bonk, bonk on the head.
Not only is this not an actual coup, this is not even revenge or retribution but long and desperately needed reform.
And while counting coup was a way to humiliate an opponent it is not clear if that is the current intent, though one can be sure there is more than a little snickering glee amongst those involved in the process.
What is happening now is the tearing down – from the inside – of the ossified calcified oppressive state that has built up over the last 40 years.
The deep state is finally getting its much-deserved comeuppance and it may be happening just in time.
Bonk.
Author
Agriculture
How USAID Assisted the Corporate Takeover of Ukrainian Agriculture

From the Brownstone Institute
By
A recent essay titled “The Real Purpose of Net Zero” by Jefferey Jaxon posited that Europe’s current war against farmers in the name of preventing climate change is ultimately designed to inflict famine. Jaxon is not speculating on globalist motives; he is warning humanity of a rapidly unfolding reality that is observable in the perverse lies against cows, denigration of European farmers as enemies of the Earth, and calls by the WHO, WEF, and UN for a plant-based diet dependent entirely on GMOs, synthetic fertilizers, and agrichemicals.
Revelations about the evil doings of the Orwellian-monikered “United States Agency of International Development” (USAID) reveal a roadmap to totalitarian control unwittingly funded by America’s taxpaying proles. USAID’s clandestine machinations have long focused on controlling local and global food supplies as “soft colonization” by multinational chemical, agricultural, and financial corporations. European farmers revolting against climate, wildlife, and animal rights policies are harbingers of this tightening globalist noose.
The roots of the current globalist plan to “save humanity from climate change” link directly to the infamous Kissinger Report, which called to control world food supplies and agriculture as part of a globalist collaboration between nation-states and NGOs to advance US national security interests and “save the world” from human overpopulation using “fertility reduction technologies.” Kissinger’s 1974 Report was created by USAID, the CIA, and various federal agencies, including the USDA.
Fast forward to 2003, the Iraq War justified using fear-mongering propaganda about weapons of mass destruction and neo-conservative malarky about rescuing the Iraqi people. The US-led occupation of Iraq became a rapacious profiteering smorgasbord for colonizing corporations husbanded by USAID. Iraq is heir to the birthplace of human civilization, made possible by early Mesopotamian agriculture: many of the grains, fruits, and vegetables that now feed the world were developed there. Iraq’s farmers saved back 97% of their seed stocks from their own harvests before the US invasion. Under Paul Bremer, Rule 81 (never fully implemented) sought to institute GMO cropping and patented seed varieties, as Cargill, Monsanto, and other corporations descended upon the war-ravaged nation using American tax dollars and USAID.
That playbook was more quietly implemented during the Ukraine War, once again orchestrated by USAID. Before the Russian invasion on February 24, 2022, Ukraine was the breadbasket of Europe, prohibiting GMO technologies and restricting land ownership to Ukrainians. Within months of US intervention, USAID assisted in the dismantling of these protections in the name of “land reforms,” free markets, financial support, improved agricultural efficiency, and rescuing the Ukrainian people. In just two years, over half of Ukraine’s farmland became the property of foreign investors. GMO seeds and drone technology were “donated” by Bayer Corporation, and companies such as GMO seed-seller Syngenta and German chemical manufacturer BASF became the dominant agricultural “stakeholders” in war-torn Ukraine. Russia may withdraw, but Ukraine’s foreign debts, soil degradation, and soft colonization will remain.
The UN, WTO, WHO, and WEF all conspire to peddle a false narrative that cows and peasant farmers are destroying the planet, and that chemical-dependent GMO monocropping, synthetic fertilizers, and patented fake meats and bug burgers must be implemented post haste (by force if necessary) to rescue humanity. The argument that pesticides and synthetic fertilizers (manufactured from natural gas, aka methane) are salvific is patently false. They are, however, highly profitable for chemical companies like Bayer, Dow, and BASF.
Jefferey Jaxon is exactly correct. The Netherlands committed to robust agricultural development following a Nazi embargo that deliberately inflicted mass famine following their collaboration with Allied Forces in Operation Market Garden. France boasts the highest cow population in all of Europe. Ireland’s culture is tightly linked to farming as part of its trauma during the (British-assisted) Irish Potato Famine. The corporate/NGO cabal now uprooting and targeting farmers in these nations and across the EU in the name of staving off climate change and preserving wildlife is a direct outcropping of Kissinger’s grand dystopian scheme launched through USAID in 1974.
Americans watch European farmer protests from afar, largely oblivious that most all of US agriculture was absorbed by the Big Ag Borg generations ago. Currency control linked to a (political, environmental, and economic) social credit scorecard promises the fruition of Kissinger’s demonic plan: “Control the food, control the people.”
Modern humans suffer a double hubris that blinds them to the contemplation of the truth of Jaxon’s hypothesis: a cultish trust in technology, coupled with an irrational faith in their self-perceived moral superiority to past civilizations (Wendell Berry calls this “historical pride”). Yet, as long as mankind has had the capacity to harm another for personal gain, humans have devised ways to control food for power or profit. Siege warfare generally depended on starving defenders of castle walls into submission.
Even if globalist food control proposals are well-intentioned, a monolithic, monocultured, industrial-dependent worldwide food system is a lurking humanitarian disaster. Berry observed:
In a highly centralized and industrialized food-supply system there can be no small disaster. Whether it be a production “error” or a corn blight, the disaster is not foreseen until it exists; it is not recognized until it is widespread.
The current push to dominate global food production using industrial systems is the cornerstone of complete globalist dominion over all of humanity. The “Mark of the Beast” without which no American will buy or sell goods – including guns, bullets, or factory-grown hamburgers and cricket patties – is mere steps away. Mr. Jaxon is correct that these leaders “know these basic historical and current facts,” and that “[f]armers are becoming endangered because of government [climate] policy … and it’s being allowed to happen.” USAID has been actively seeding and watering this dystopia for decades.
Klaus Schwab and Bill Gates are as fully cognizant of this fundamental truth as Henry Kissinger was in 1974. USAID has aided all three. Having lost almost all of their small farms over the last century, Americans are well ahead of Europeans in their near-complete dependence on industrial food.
That’s the plan.
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