Interesting (Literally)

While thinking about the news that yet another Trump tariff scam got noticed by a court as illegal yesterday, it occurred to me to ask whether the regime has to pay interest on illegally collected tariffs. The answer is: Yes.

My first reaction was that the rate -- 4.5% on amounts owed over $10,000, 6% on the amount up to $10k -- is far too low. To the extent that interest charges are an incentive to not pull this kind of shit, the higher the better. Perhaps the average credit card interest rate (a little over 20% APR), or even "payday loan" rates (which can approach 400%).

But then I thought a little more about it:

• Tariffs, as taxes on the import of goods, are initially paid by the importer, but mostly passed on to the final retail customer.
• Refunds of illegal tariffs are paid to those importers because it would be impractical (in many cases impossible) to track down everyone who paid an extra $5 on a $50 retail purchase.
• So the importers are getting their money back after having recouped much of that money from their downstream customers.
• And they're getting it back from those customers via taxation and government borrowing.

So any interest charges would simply be additional costs to those retail customers, not to the government, because the government doesn't really have any money it hasn't stolen in the first place.

It makes more sense for the interest burden on illegally collected tariff refunds to be imposed directly on the person or persons who ordered their collection in the first place. In this case that would be Trump, but if Congress passed an unconstitutional tariff and the president signed the bill, that would split the burden between the members of Congress who voted for it, the president, and maybe one more person (the vice-president, if he or she cast a vote in favor of the bill in the Senate). Garnish their wages and auction off their assets if necessary to collect restitution.