America is becoming the world’s largest tax haven

Trump supports one tax: import tariffs. He believes foreigners pay these tariffs. This, he thinks, allows tax cuts for billionaires. He also believes tariffs will reduce trade deficits and bring back manufacturing.

However, importers pay tariffs, raising domestic prices. This is happening as the US recovers from inflation. Basic economics shows that trade deficits arise from savings and investment gaps. Trump's tax cuts for billionaires will widen this gap. Ironically, such policies increase the trade deficit.

Since Reagan's time, conservatives claimed tax cuts boost growth. But this did not happen for Reagan or Trump in his first term. Research shows tax cuts for the wealthy do not improve growth or reduce unemployment. Instead, they increase income inequality immediately.

The proposed extension of the 2017 Tax Cuts and Jobs Act could add $37 trillion to national debt over 30 years without economic benefits. Trump is also worsening the trade deficit at a microeconomic level.

The US has shifted to a service economy with major exports like tourism and education. However, Trump has undermined these sectors systematically. Tourists and students may avoid the US due to fears of detention or visa cancellations.

China is a key trading partner for America and supplies critical imports. China has retaliated against US policies already. Concerns about stagflation are affecting stock and bond markets.

Elon Musk’s Department of Government Efficiency may cause tax revenues to drop by over 10% this year due to weaker enforcement. Cutting around 50,000 IRS workers could lead to $2.4 trillion in lost revenue over ten years.

In contrast, provisions in the Inflation Reduction Act aimed to boost IRS staffing by $637 billion over ten years. The agenda seems clear: lower taxes for the rich and weaker enforcement overall.

With capital able to move freely across borders, international cooperation is essential for fair taxation of corporations and wealthy individuals. Halting beneficial-ownership data collection reveals a pattern of dismantling frameworks against tax avoidance.

Pausing enforcement of the Foreign Corrupt Practices Act suggests a tolerance for bribery in business practices now exists in the US government under Trump’s leadership.

This situation appears driven by Trump, Musk, and their billionaire allies aiming for lawless capitalism similar to offshore zones. It represents an assault on laws that limit extreme wealth accumulation.

Their support of crypto highlights this trend; unregulated exchanges have fueled illicit economies globally under Trump's administration. The Treasury Department has eased sanctions on platforms obscuring transactions.

Trump signed an executive order creating a “strategic cryptocurrency reserve” and hosted a White House crypto summit as well. The Senate even removed requirements for crypto platforms to identify users.

Trump himself issued a controversial meme coin and plans a crypto-based video game soon too. He appointed Paul Atkins—a pro-crypto advocate—to lead the Securities and Exchange Commission.

Cryptocurrencies primarily serve secrecy purposes rather than legitimate transactions using established currencies like dollars or euros. Demand arises from those wanting to hide money linked to illegal activities like money laundering or tax evasion.

The global community cannot remain passive amid these developments; cooperation can yield results like the global minimum tax on multinational profits being adopted by over 50 countries now.

Despite distancing itself from international agreements, America's absence might strengthen multilateral negotiations toward better outcomes globally—unlike past instances where it weakened agreements favoring special interests during OECD negotiations on corporate taxation.

Now other nations can focus on creating fair global tax systems without US interference hindering progress toward addressing extreme inequality through cooperation instead of rising authoritarianism.