Former member of the Federal Reserve Board, Stephen Miran, did not waste much time post-government to come out publicly in favor of tariffs. In a June 28th thread on X, Miran made the market case for tariffs – centered on the “optimal tariff,” failed economic models, and revenue tariffs to curb or cut taxation.
With the IEEPA tariffs under litigation during Miran’s tenure, he had to be quiet about his thoughts on tariffs or “it would have interfered with the legal case,” he said on X. “If I had said that tariffs were good for revenue and tax purposes, that’s not actually the reason we gave in law for the tariffs. So I couldn’t speak about revenue and taxation on the matter,” he said.
But now he can. He is in favor of the revenue tariff, something CPA advocated for in a 2024 report by Chief Economist Emeritus Jeff Ferry. The CPA model showed that a 10% baseline tariff on all countries would generate at least $263 billion in revenue, enough to provide substantial relief to lower income households and lower taxes for the middle class.
Finally, I am able to say something about tariffs I wasn't able to say last year. I'll tell you why at the end of the thread. https://t.co/g0dxsdB9fR
Miran returned to the private sector in mid-June. He is back in the financial markets, this time as a senior strategist for Hudson Bay Capital, a hedge fund based in Greenwich, Conn. What’s interesting in Miran’s comments is that we have all been told the markets hate tariffs. Even light consideration of them could get you laughed out of the Harvard Club in Manhattan. But not only did Wall Street get used to them, there was a small number of outspoken investors who came out early in favor of using tariffs as a form of tax revenue, insofar as it meant a better grasp of our fiscal deficit, and lower taxes for all.
In his post, Miran presents as the former Fed member finally speaking his mind. Here, he notes the relatively low amount of retaliation from major trading partners, something most economic modelers got wrong. Only China, Canada and to a lesser extent, the EU, retaliated. Even free trade agreement nations like Mexico and South Korea did not retaliate against the IEEPA tariffs.
Still, at the heart of Miran’s message is tariffs as fiscal policy.
The case for tariffs is overdetermined: There are national security, financial stability, and tax reasons for doing tariffs. I find all of these persuasive. I think tariffs will be with us for good, because just as the Biden administration saw the wisdom of keeping the tariffs from Trump’s first term, subsequent administrations will as well with the new tariffs.
The Trump administration seems to lean into three ways to view tariffs. One of the more obvious ways they have been used is as a negotiation tool. But for Miran, they need to be longer lasting. The intellectual argument for tariffs is not as a tool for punishment, but as a policy lever for national security. That means protecting certain sectors that can be used for the defense industry like steel and aluminum, or protection for high middle class employment sectors like automotive. This bucket can be difficult to fill because it risks leaving out sectors that Washington does not deem a national security priority, putting entire sectors at the mercy of imports.
The other bucket is tariffs as revenue, which could keep the fiscal deficit in check providing government spending does not get out of control, and put a cap on federal tax collection.
Although Miran is no longer in government, markets are influential, and Miran is making the markets case for a revenue tariff.
Earlier this year, Amazon CEO Jeff Bezos even suggested that the bottom half of American tax payers should pay “zero” federal income taxes. It could happen with revenue tariffs, something Congress could even legislate into law.
This year marks the 250th anniversary of the country’s founding. The original founders of the U.S. used tariffs for both revenue and protection against European imports in order to build an industrial base at home. That means some imports will have higher tariffs for protection, like the Section 232 tariffs or the 301s used against China more broadly, and others will be used for revenue.
CPA’s landmark 2024 report on a 10% revenue tariff noted that the U.S. taxpayer benefits, opposed to the narrative that tariffs are a tax on them stripping their wallets of thousands of dollars annually, as groups like the Tax Foundation allege. The larger the share of tax revenue coming from tariffs paid for by foreign exporters, the better. Under the CPA model, a 10% revenue tariff could raise government tariff revenues from 2% to 8%, meaning Washington can afford to cut taxes elsewhere.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
No Longer With the Fed, Stephen Miran Can Now Tout Tariffs as Tax Policy
Former member of the Federal Reserve Board, Stephen Miran, did not waste much time post-government to come out publicly in favor of tariffs. In a June 28th thread on X, Miran made the market case for tariffs – centered on the “optimal tariff,” failed economic models, and revenue tariffs to curb or cut taxation.
With the IEEPA tariffs under litigation during Miran’s tenure, he had to be quiet about his thoughts on tariffs or “it would have interfered with the legal case,” he said on X. “If I had said that tariffs were good for revenue and tax purposes, that’s not actually the reason we gave in law for the tariffs. So I couldn’t speak about revenue and taxation on the matter,” he said.
But now he can. He is in favor of the revenue tariff, something CPA advocated for in a 2024 report by Chief Economist Emeritus Jeff Ferry. The CPA model showed that a 10% baseline tariff on all countries would generate at least $263 billion in revenue, enough to provide substantial relief to lower income households and lower taxes for the middle class.
Miran returned to the private sector in mid-June. He is back in the financial markets, this time as a senior strategist for Hudson Bay Capital, a hedge fund based in Greenwich, Conn. What’s interesting in Miran’s comments is that we have all been told the markets hate tariffs. Even light consideration of them could get you laughed out of the Harvard Club in Manhattan. But not only did Wall Street get used to them, there was a small number of outspoken investors who came out early in favor of using tariffs as a form of tax revenue, insofar as it meant a better grasp of our fiscal deficit, and lower taxes for all.
In his post, Miran presents as the former Fed member finally speaking his mind. Here, he notes the relatively low amount of retaliation from major trading partners, something most economic modelers got wrong. Only China, Canada and to a lesser extent, the EU, retaliated. Even free trade agreement nations like Mexico and South Korea did not retaliate against the IEEPA tariffs.
Still, at the heart of Miran’s message is tariffs as fiscal policy.
The Trump administration seems to lean into three ways to view tariffs. One of the more obvious ways they have been used is as a negotiation tool. But for Miran, they need to be longer lasting. The intellectual argument for tariffs is not as a tool for punishment, but as a policy lever for national security. That means protecting certain sectors that can be used for the defense industry like steel and aluminum, or protection for high middle class employment sectors like automotive. This bucket can be difficult to fill because it risks leaving out sectors that Washington does not deem a national security priority, putting entire sectors at the mercy of imports.
The other bucket is tariffs as revenue, which could keep the fiscal deficit in check providing government spending does not get out of control, and put a cap on federal tax collection.
Although Miran is no longer in government, markets are influential, and Miran is making the markets case for a revenue tariff.
Earlier this year, Amazon CEO Jeff Bezos even suggested that the bottom half of American tax payers should pay “zero” federal income taxes. It could happen with revenue tariffs, something Congress could even legislate into law.
See CPA’s Government Affairs Director EJ Valentine’s op-ed titled “Republicans Should Eliminate Federal Income Taxes for Half of U.S. Workers” in DC Journal, from June 2.
This year marks the 250th anniversary of the country’s founding. The original founders of the U.S. used tariffs for both revenue and protection against European imports in order to build an industrial base at home. That means some imports will have higher tariffs for protection, like the Section 232 tariffs or the 301s used against China more broadly, and others will be used for revenue.
CPA’s landmark 2024 report on a 10% revenue tariff noted that the U.S. taxpayer benefits, opposed to the narrative that tariffs are a tax on them stripping their wallets of thousands of dollars annually, as groups like the Tax Foundation allege. The larger the share of tax revenue coming from tariffs paid for by foreign exporters, the better. Under the CPA model, a 10% revenue tariff could raise government tariff revenues from 2% to 8%, meaning Washington can afford to cut taxes elsewhere.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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