Taxes, Value, and Volunteering

 Word of the Episode: Tariff

• The hosts define a tariff as a tax imposed by a government on goods, usually on imports, with the goal of making foreign goods less competitive compared to domestic products. Tariffs can also be applied to exports, though this is less common and often used when a country has a unique product or resource.

Types and Purposes of Tariffs

• There are two main types:
  • Specific tariff: A fixed fee per unit (e.g., $500 per container).
  • Ad valorem tariff: A percentage of the declared value of the goods.
• Tariffs serve several purposes: raising government revenue, protecting domestic industries, and exerting political leverage in trade relations.

Recent Changes and Examples

• The episode discusses the recent suspension of the "de minimis" rule for China, meaning all packages from China are now subject to tariffs, regardless of value. This has led to stories of unexpectedly high fees for imported packages.
• The hosts note that tariffs can be temporarily raised or lowered due to political decisions, trade deals, or negotiations. For example, recent high tariffs on Chinese goods were reduced from 150% to 30% for a 90-day period, prompting businesses to rush to import goods before rates potentially rise again.

Historical Context

• Tariffs have a long history, with roots in Latin, Greek, Turkish, Arabic, Italian, and French, all referring to set prices or lists of rates.
• In the U.S., tariffs were historically used to protect "infant industries" and encourage domestic manufacturing. Their effectiveness remains debated among historians and economists.
• Tariffs have played roles in major historical events, including the Civil War.

Tariffs vs. Other Taxes

• Tariffs are distinct from other taxes because they are specifically applied to goods crossing borders and are always mandatory, not voluntary.

Volunteering and Social Norms

• The conversation shifts to the nature of volunteering and donations, contrasting them with compulsory tariffs and taxes.
• The hosts discuss how people donate money, goods, time, or skills to causes they value, often driven by belief in a cause or community importance.
• They reflect on how volunteering, once a strong social norm, may be less common today, and how cultural expectations (like tipping) influence voluntary giving.
• Volunteers are generally held in high esteem, especially when their efforts are in addition to fulfilling regular responsibilities.

Conclusion

• The episode provides an accessible explanation of tariffs, recent policy changes, and their broader economic and historical significance. It also explores the contrast between compulsory taxes and voluntary contributions, touching on changing social norms around volunteering and community involvement.

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Any views expressed on this podcast are those solely of the hosts and is for entertainment purposes only. None of the content is medical advice or financial advice.

Special thanks to Tim Wright aka CoLD SToRAGE for his permission to use the song Operatique.

Transcript

I Hate Talking: 0:29

Welcome to episode 58 of I Hate Talking. -- Hi -- everyone. So I don't think it will come to anyone's surprise that our word or phrase of this episode is tariff. Hm, no, it was a surprise to me, but then you said the word and I'm not surprised after all. Yes, so we're gonna take a little bit closer look at the word tariff since we did give a off the cuff definition in our last episode and I think we got it pretty much right. So basically, a tariff is a tax imposed by a government on goods. Usually, those are the goods that are imported from other countries where that is paid to the importer. So like we were talking about last time where the US government is imposing tariffs on foreign countries on the import of goods into the US that that tax is then effective for those goods coming in. And it is stated here that that is done with the express purpose to make foreign goods less competitive compared to domestic products. And then also tariffs can be a tax on exports, though this is less common where if you're actually sending something as an export from the source country, there would actually be a tax on that. And why would they do that? I suppose maybe they have a really special export that could only be sourced from that one single place or That is something that is specific to that country that they could actually generate some government revenue from that, regardless of particular demand because they have the only supply. OK, so instead of like a tax for their citizens, They would provide a tariff, so they still get that money. They, as in the government gets the money? Yes, they, the government is always the one getting the taxes, it seems. So the AI that I asked does cite several purposes here, and we touched on those last time as well, raising government revenue, so generating that income for the government. Protecting domestic industries from foreign competition and then basically just exerting political leverage in trade relations. Now there is a little bit more detail here in terms of two main types of tariff. There is a specific tariff and that's where it's a fixed fee per unit. So it could even be a unit in terms of the entire shipment. So it could be that there would be a tariff of $500 per container or something like that. Or there's the ad volorum tariff, which is basically just means a percentage, so the declared value of the goods and then a percentage applied to that, and that's what we were talking about, mostly for the ones that are in play currently where it is a advaorum tariff, where it is a certain percentage. OK. And then, like we talked about last time, this hopefully will encourage people to buy more domestic products since the imports are more expensive, but there's a lot of debate on that with economists and political pundits that whether that actually works or not. How true is it? I haven't researched it. I've just seen on like Instagram and such, so it's not super reliable, but people sharing like screenshots or photos of like, the US mail. They'll get like a bill, like uh you owe us $62 or something to get your package, and they'll like the product costs $10 and then now they're wanting to add $62 or whatnot to for us to receive the package. That may be something that's happening. I'm not, I haven't heard about that. I guess it could be happening where that would be a specific tariff that is just a base tariff that is applied to incoming shipments and it also may be something that they are experiencing that's new because of the de minimis rule that we were talking about last time where Previously, packages that were $800 or less were not subject to any tariffs, but that particular de minimis rule was suspended for China specifically, where regardless of the declared value of the goods, it will be subject to tariffs. OK. Or it also might just be a scam and somebody's trying to collect some money from unsuspecting business people that think they have to pay this and They're just mailing their check to somebody somewhere and it's not actually going to the US government. Yeah, well, there you go, a new scam. I got my very first whole scam today. You get them a lot, right? You get the messages that you have unpaid tolls, unpaid tolls, yes. And I know a lot of people do, and I've never got one until today. I was almost excited, and then I was also super sad that the scammers have my number. Indeed. So the word tariff actually has some interesting etymology and it actually goes back quite a ways and it is something that comes from Latin and it would have been used also by the Greek speakers of the day back then where it is the word Tarif, T A R I F F E, which means a set price. And it was actually instituted I guess by those particular empires at the time for particular trade with the Turks. So it is also in Turkish a word called tarif, which is a list of prices, tables of rates of customs. And it also would have been in Arabic as well, basically to mean to know, to be able to recognize, to find out. So some of the things there in terms of the keeping of records and the monetary value with set prices. And then from the Latin came to be used in Italian and French. And then in English and didn't really change all that much throughout that time, it basically kept that same root word pretty explicitly as it went through all the different languages and arrived in our modern English term tariff. OK. So that is our word or phrase of the episode tariff, and I think like we said that we got that pretty spot on in our previous episodes. So it basically is a tax. It's just the type of tax and who institutes it and where the tax gets applied that sets tariff apart from just a standard tax. Will it go back? Will we lose this tariff one day and things will be cheaper again, or is that just TBD? I think it's already been suspended. Everywhere? I know some places, right? Like uh UK made a deal or something, and I thought I saw China have like a 90 day hold. Correct. Yeah, there were some trade deals made with the UK and then the status of the Chinese tariffs are still in effect, but with reduced rates and then there's also A 90 day pause on those very high tariffs that were instituted, I believe, on May 2nd, so they didn't last long before they came to the reduction from 150%, I guess at one point, it went down from 150 to 145% and now has dropped to quote unquote standard tariff of 30%. OK. Now, of course, after that 90 day pause, which there's really no guarantee that it would even go through the entire 90 days if something else happens or. The political powers that be would want to change something, but at the end of the 90 days, it could go back to that or maybe the 90 days would be extended, or there would be some sort of resolution that would allow it to be instated for a longer period of time, but it does seem that at least temporarily, It is greatly reduced from what it was. So, if I buy something tonight, I want something from overseas, I should buy it now. And not wait till the end of summer. Oh yeah, and I think that's what probably a lot of companies are doing. So like we talked about last time, I think a lot of particular manufacturers were pausing, purchasing and shipments from China specifically. So I would imagine that they are now taking advantage of this 90 day window to Restock their supplies and take that very advantage of the thing that you stated that during this window, they're going to be able to get things at a quote unquote reduced rate because of the tariffs. -- Can -- you imagine the poor people that bought something that week, the tariffs were high, just to have them go back down? I'd be so mad. Indeed, I'm sure that happened to at least some people or some companies. Mhm. They can't get a refund? No, they can, I would imagine not be able to get a refund. And then I was also reading some information about tariffs historically within the United States specifically, and there's been a lot of usage of tariffs over the lifetime of the United States and in fact, There were a number of presidents early on that instituted tariffs and were in support of tariffs as a type of protectionism of the United States, where basically they call them at that time, quote unquote infant industries where basically in order to kickstart industry within the United States. They impose tariffs on foreign goods so that that exact thing, the manufacturer of domestic goods was more attractive to people in order to produce things and supply people with what they were demanding. And then I guess World War 2, that saw a reduction and I guess now we are coming back to perhaps some of that protectionism type intent that we talked about last time. As well. And then I believe there's even some things with the Civil War with certain things being tariffed between the North and the South that also played a part in some of the division in the country at that point in time as well. So interesting things to think about. There even is a lot of debate on whether the tariffs in the 1800s through the early 1900s were effective or not and whether they actually played a part in some of the industry being built in the US. So even for the things that we can look back at history, There is quite a dissent between various experts on whether it was effective and whether it was the best way to do things to achieve a certain outcome. Or whether it was even responsible for the outcome itself. So I think even now today, we can see the exact same thing where there may be people that are either in support of tariffs or not and Whether the intended effect will come to fruition or not. And if it does, whether tariffs actually played a particular significant role in achieving those things. OK. So that is our word or phrase, like we said, tariff and hopefully give some insight in terms of what's happening in our world today and that it's not really anything new. It's been around for hundreds and hundreds of years, even back to the Greek Empire. That's interesting. But there is one thing for certain. Is that tariffs are not voluntary. It is required. So, if tariffs were voluntary, do you think people would pay them or not? No, I don't think so. Yeah, I think you're probably right. There are people that maybe would have disposable income that believed so strongly that this was the right thing to do, that I could see maybe a very, very small percentage of people would maybe pay a voluntary tax, like a tariff or something like that. I think that's even been tested in some governments where like they have a base tax and then like if you have some extra money, you can Basically donate to the government for governmental programs and things of that nature. But yes, you're right. For the most part, taxes are involuntary and it is something that you are required to do. So, on the flip side, however, there are people that do things or give of their own funds voluntarily, and why would they do such a thing? Yeah, I guess when you word it like that. Some people, if you say tariffs, I feel like people would not want to pay it. But if it's a donation to the government or to a program, Yeah, there will be people that would be interested cause they'd care about that. Just like people donate to their local church or their local school, or, you know, the Ronald McDonald Center is a really great program that people donate to. So, funds, for sure, can be donated when somebody sees a value in something. And um I think time is a big thing that's also donated by volunteers if you care about something. Yep, that's true. So I guess those are the two big categories of things that you can donate. I guess you could also donate material goods, right, and that would sort of fall within the monetary category where perhaps you're donating just cash money, or you are donating some sort of used item or some other physical asset that you have and want to be used by. The particular entity that you are donating to. And then time, I think is a big one and I think Maybe a subcategory within the time is also skill. So maybe there's some things that don't require a whole bunch of skill but do require time to be spent on helping that particular entity achieve its goals or help people or do whatever they are doing, but in a lot of instances that there will also be the particular aspect of skill that if you have a certain skill set or talent. That, that could also be employed, so to speak by the particular program or entity of which you are donating your time and really they are leveraging that skill that you have in order to achieve their desired outcome. Mhm. I mean, I just feel like it's very community based in a lot of ways. Because you could live by yourself, in your house, and not interact with others, and just do your job, get your money, buy your groceries, and be done. Uh, even in a way of volunteering, even, you know, if you're paying a tip, that is voluntary, you value that person doing something, so you're gonna give them extra money that you do not have to give, or a lot of programs and activities. Do not have the funds to pay someone. So if somebody values that, they're gonna spend some time helping that organization or program or cause or anything like that. I think a lot of people at surface Value, don't want to volunteer though. I think they value their time so much that I think it's hard to picture doing something for free. Yes, I suppose that's true. And when you first started talking about this, you were using a lot of words like believe or belief and value. I think another word that you could throw in there would be importance that when somebody is genuinely volunteering, they are doing it because they believe in the organization of which they are donating their time and money. And that, as you said, they value something that that particular organization is doing or providing. And they see the importance of how they can contribute to that. But when you mentioned leaving a tip, there also may be some sort of cultural expectation for doing certain things where leaving a tip may not be culturally expected in certain cultures, but I think within the United States, it is culturally expected. So in some ways, That particular example may be done at least a little bit out of compliance to a social norm, and I wonder if volunteering in general is falling out of social norms. Like if you volunteer for an organization, you're outside social norms. That's what you mean? Essentially, I would phrase it a little bit differently where volunteering perhaps used to be the social norm and it is no longer the social norm. So it's not necessarily that you are outside of the social norm, but I guess for all intents and purposes you are, but it's more that the social norm has changed that volunteering is not necessarily important. So it's not that you would be seen as like an outcast or an outsider, it's just Not something a normal person would do. Do you ever look at people that are volunteering in some way? And either look down on them or hold them to a higher esteem. Which would you tend to do? I think in general, I would hold them to a higher esteem. If that is something that they can do in addition to their regular means of income and the regular job. So I guess as long as they are doing things to fulfill their normal roles and responsibilities and have that extra ability and time to be able to do that, I would hold that in higher esteem. I guess there's maybe a little bit of the lower view if it's. At the cost of something that I would say would be more important. For example, a theoretical person was volunteering so much that they got fired from their job and then therefore didn't earn a paycheck and then could not feed their family and spiraled downwards, but all the time, yet they were still volunteering at various nonprofits and organizations that That probably is not a picture of success for volunteering, right? And I feel like I have a lot of mixed emotions. I mean, we personally volunteer a lot for stuff, different groups we're in, we do love it, but if I don't volunteer for something, I either feel guilt about it, if other people are like, oh, I know this is important. And I should be doing more to help. Or on the flip side, if I don't see value in something, and people are spending a lot of time volunteering for it, it's frustrating to me cause I'm like, there's way more important stuff, in my opinion, or just like pay somebody such and such and get it done right and get it done better and faster than all this hassle. Yes, I suppose so. And I guess everything comes down to a cost-benefit analysis at some point in time, where is it better to get a volunteer that may not be able to do something perfectly versus spend some of your resources to hire a professional to do it in a certain way. And also your comment about volunteering. If you volunteer for everything, then other people can't volunteer for anything. Yeah, I think that's something you and I both have a hard time with is not volunteering sometimes and giving other people an opportunity to help. Yes, I suppose so. I think my particular instance is. I will Do one of two things. One, if there is nobody stepping up and it sort of seems like maybe I'm the last resort is that I will fulfill that particular role. Assuming other things are in play, like I already discussed that it's not gonna overburden you that other priorities are going to go by the wayside to the detriment of certain responsibilities that I have. And then also, secondly, is if there is somebody volunteering and they're doing. Just to put it bluntly, a bad job that I may feel the need to step in and make things better from that perspective as well. Yeah, OK, so what do we do with that? Because if their hearts in the right spot, but they're doing a bad job, I guess where's the line? Because for me, I can see if it starts to get detrimental. Then we have to step in and be like, hey, you know, and redirect somehow or whatnot. Where's the line between just not done the way we think it should be done versus a detriment to the organization? Well, there's even another point in there is. What one thinks is the right way versus The actual right way. So, I will take the opinion 99% of the time that there is a best way to do something. And I will also be open to the fact that there may be instances where I do not know the best way. So there could be the possibility that somebody that at the outset, perhaps looks like they're not doing it the best way, but maybe they are, and once you learn how they're doing it, you'll see that it is actually a better way than you had originally thought. But then to your point on whether it is a line that needs to be addressed or not comes down to again that cost-benefit analysis, is it better to either spend resources or your own time or is it something that can be quote unquote good enough that this person is doing it in a certain way and you just live with that. Mhm. And I wonder if it's a cultural thing or what. I'm just curious about how other cultures do it, because here we have like a lot of nonprofits, we have a lot of not for profits, and then we have for-profits. And I wonder if there's a value placed on all those three different categories if people see value in their time and money spent there. Yeah, I suppose so. The problem is not completely non-existent even in for-profit businesses because there could be people that are doing a bad job or things that aren't standard. Now you have I guess a little bit more leverage there because there's the possibility that if they don't correct their behavior that they will no longer be employed there. So, I guess in some ways, a volunteer organization doesn't have quite that same leverage where they can actually have something to use as a particular incentive to have people do things a certain way, other than just asking them and I guess. At the worst case, asking them to step away from that particular role, if it is causing a detriment to either the job that they're performing or the organization in general. Right? It reminds me of, like, value for our kids and how we want them to work hard with their hands and help people. It made me think about it when you talk about the salaries and paying someone, because I go back and forth on, like, paying our children for things, because I want them to learn how to use their money wisely, but also, I don't want them to just do a job because it's money. I want them to do a job because they value, like for us, or at our church or anything like that, I want them to say, there's a job that needs to get done. I'm gonna do it because I'm part of this family. Not because I'm gonna get a couple dollars. And there we have once again revisited the concept of value. So perhaps that's our big takeaway for this episode is that. People are going to be motivated by whatever they perceive is valuable, whether that be money or helping other people or creating a stable community and family and perhaps you can achieve all those things through hard work and volunteerism. And don't forget to pay your taxes. That's what I was thinking. I was like, well, if you volunteer for everything, you won't have money for your tariffs. Precisely. Well, very good. Hopefully some insights that you can take and consider and perhaps you've come to some insights that you think others would enjoy, and if so, you can always share this episode and this podcast. It's voluntary. It is voluntary at this point. So, from your friends at I hate talking, until next time, remember, it is only through talking that we begin the journey to understanding.