“”On April 1, 2024, California raised its minimum wage from $16 to $20 per hour for fast-food workers employed at chains with more than 60 locations nationwide,” Jeffrey Clemens, Olivia Edwards, and Jonathan Meer write in a National Bureau of Economic Research working paper that was first addressed by Reason’s Peter Suderman in the November print issue. “Our median estimate suggests that California lost about 18,000 jobs that could have been retained if AB 1228 had not been passed.””
The Laffer curve confuses economic incentives with social reality. Most people can’t just stop working or even work much less, because tax rates go up. Even those who can stop working, often keep working in the face of higher tax rates. Some countries with high tax rates have high growth. The marginal tax rate whereby most people will work less is very high, like 70%.
“President Donald Trump says his tariffs protect American businesses, but more than 700 small businesses represented by We Pay The Tariffs beg to differ.”
“Board game makers have been hit particularly hard by Trump’s tariffs, which have raised the cost of importing just about everything. Cephalofair is based in California, but like many other businesses in the industry, Johnson’s company relies on contractors in China and Vietnam to make the tokens, pawns, cards, and other physical elements of its games.
Manufacturing all those parts in the U.S. is not possible if game companies want their products to be competitively priced. With high tariffs in place, the costs compound quickly. Nathan McNair, the co-owner of Pandasaurus Games, broke down the math in a post on his company’s website. The added cost of the tariffs makes every step more complicated, from design to sales, and can even change what games a company chooses to make in the first place. “This has not just squeezed our margin; this has substantially increased our risk,” he concluded.
Trump’s tariffs have already stung Cephalofair in several ways.
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for businesses like Johnson’s, which can’t afford to risk the possibility of being hit with a massive tariff bill just because a shipment arrives at the wrong time.
Instead, those businesses will do what Johnson has done: Delay orders, slow production, and hope more stability emerges.”
“He’s planning to pay for these proposals with various tax hikes, including a large jump in the city’s corporate tax rate from 7.5 percent to 11.5 percent.
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Unfortunately, raising the corporate tax rate could also hinder the job market, cause corporations to relocate, and decrease long-term government revenue, potentially damaging New York’s status as the financial capital of the world.
Corporations hit with higher tax rates would seek ways to cut costs, possibly harming workers through either layoffs or lower wages.
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In the United Kingdom, for example, around one in six British companies cut hiring in the fourth quarter of 2024 in anticipation of tax hikes that took place in April 2025. If New York employees aren’t directly laid off, they could face lower wages in the long run.
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Already, the exodus of banks from Wall Street to corporate tax havens, such as Elliot Management’s relocation to Florida, has cost the city millions in managed assets. New York City simply cannot afford to watch other businesses follow.
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“”Businesses have only three options to pay for higher taxes: raise prices; reduce costs; or lower returns to investors,” as the authors of the U.S. Chamber of Commerce report wrote. “In reality, they do all three.” The fourth option, one even more feasible if a tax hike only hits New York City, is that businesses will flee.”
“Throughout the Greek debt crisis, the overwhelming majority of Greeks wanted to stay in the Eurozone but bridled at the austerity measures required to do so. Today Greece ranks among the top five economic performers in Europe. Unlike Greece, which required international intervention to implement necessary reforms, Argentina took the task upon itself, the voters rebuking establishment parties and taking a chance on a political outsider. If Greece was worth saving, then Argentina is no less deserving of a lifeline.”
“the “national security” argument clearly has been foundational to Trump’s trade policies. Higher tariffs will make America’s military more self-sufficient and capable against future threats; that’s the White House’s point of view.
One problem: that’s not how the people actually in charge of America’s national security see it.
“The Defense Department routinely acquires items and materials from foreign sources indispensable to meet defense needs that are not readily available or produced in sufficient quantities within the United States,” wrote John Tanaglia, director of pricing, contracting, and acquisitions for the Pentagon, in a memo dated August 25.
The memo instructs other officials at the Pentagon to provide “duty-free entry certificates” to military purchases that would otherwise be subject to tariffs. Doing so, the memo explains, will “maximize the Department’s budget to meet warfighter needs.”
First and foremost, that’s yet more proof that tariffs are raising costs for American purchasers of foreign goods. And it is true, of course, that Trump’s tariffs are straining budgets everywhere. Being able to ignore those costs must be nice—many, many businesses across the United States surely wish they had the power to simply wave away those costs as easily as the Pentagon apparently can.”
“American goods are losing ground fast. A recent KPMG survey finds that “60% of businesses reported decreased overseas sales” in the first six months of President Donald Trump’s tariffs. For instance, U.S. liquor exports tumbled 9 percent in the second quarter of this year, with steep declines across the European Union, Canada, Britain, and Japan, which together buy about 70 percent of these exports. In another example, China—once a key customer for U.S. farm goods—has turned instead to Argentina and other suppliers, and total U.S. soybean exports are down 23 percent this year.
Smaller companies are also adversely affected. A valve and gas component maker in Napa Valley just announced that it will shut down a plant and discharge 237 employees, citing weak overseas demand linked to tariffs. Let’s not forget the upcoming Supreme Court case of V.O.S. Selections, Inc. v. Trump, where U.S. importers and resellers of wine, electronics kits, apparel, and other goods argued that the April 2 “Liberation Day” tariffs disrupted their supply chains, forced steep price increases, and threatened their viability.
American consumers, too, are paying the price. KPMG finds that nearly half of American companies have already raised prices because of tariffs; two-thirds have passed at least part of those costs on to shoppers; and nearly 40 percent have paused hiring, with a third cutting jobs.
CEOs overwhelmingly expect tariffs to weigh on business for years. Goldman Sachs estimates U.S. consumers are now footing 55 percent of the total tariff bill, while foreign exporters bear only a sliver of the costs.”
China’s stranglehold on the supply of rare earths is damaging America’s ability to build military equipment and commercial cars. So far, Trump’s trade war on China is costly with little to no reward.