SNOBELEN: Horse sense, taxes and the art of dealing with Donald Trump

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Experienced horse traders will tell you some folks make horse buying an especially frustrating experience. Those would be the folks who, when asked to price their horse, offer up a number. If the buyer meets that number, they suddenly want more.  

These folks are particularly frustrating because you can never completely close a deal. If buyer and seller eventually arrive at a price, the pain isn’t over. When the horse trailer is hooked up and the chequebook comes out, the seller will want you to throw in a saddle, two bottles of whisky and your dog. It just never ends.  

Watching the United States upend the global trading system reminds me of those frustrating horse owners. It seems like the U.S. just doesn’t know what it wants except, of course, more.  

For a couple of decades, I’ve wondered when our southern neighbours would get around to establishing a national sales tax. Most developed countries collect taxes from citizens on a combination of their earnings and spending. Spending is often a heck of a lot easier to collect.  

But the U.S. has no federal sales tax and a big hole in its budget. The last president to see a budget surplus was Bill Clinton, the result of a tax increase he passed in his first term. That temporary flare of fiscal sanity was extinguished when George W. Bush passed tax cuts and restored deficit budgeting.  

For a quarter of a century, America has plugged along, building massive debt and driving the annual deficit to nearly $2 trillion. The debt clock is rising so fast it looks like a jet turbine.  

President Donald Trump is no stranger to debt. He did his part to contribute to the fiscal mess in his first term with a big tax cut and some even bigger spending.  Heck, if you can borrow a little, why not borrow a lot?  

The second era of Trump came with the promise of more tax cuts (i.e. tax cuts on tips and overtime), paid for with a slash of excess spending on diversity, equity and inclusion (DEI), plus something called the External Revenue Service. By golly, foreign governments would pay for tax cuts, just like Mexico paid for the wall.  

It turns out that while harassing Harvard, cutting foreign aid and firing bureaucrats is fun, the resulting savings won’t cover the cost of detaining and deporting Spanish-speaking workers. Trump needs more taxes.  

I’m no expert on the art of the deal, but the art of taxing is deception. Under the guise of fighting unfair trade policies, Trump is imposing a tax on American consumers. And it’s working. Tariffs are bringing in significant tax revenue as Americans pay more for imported goods. So far, so good (unless you are an American consumer). But there are unintended consequences to the nasty rhetoric necessary to disguise the tax on imports.  

The horse sellers who frustrate horse traders with their antics often find it hard to find anyone who wants to buy from them. Life is too short and there are lots of horses.  

The American market is huge, but it’s not everything. Who wants to buy from a country that disses its best friends?  

In the coming months, Americans will find out if Trump is a master dealmaker or just a loud, unprofessional trader who overvalues his horse. Either way, taxes in America are going up.