I wrote the WSJ and Trump here is the huge cost. We have discussed. Format not great in text. You don’t need tariffs.
If you look unemployed US citizens cost in Billions
$150 Social Security Disability
$871 Medicaid
$120 Food Stamps
$1,200 Welfare
$80 Earned income tax credit
That is $2.421 Trillion for cost of U.S. workers unemployed/underemployed.
The simple math
Summary: Having an employee in the U.S. versus not is worth $20k an employee. They pay tax, healthcare, social security, etc.
Double the U.S. tax rate on corporate profits
Tariffs should only be for compliance. I.e. EPA and OSHA rules. We need a clean environment and safe workers show your costs and we provide a tariff for only those. Or a tariff equal to yours.
Summary:
Under current rules in my example if I use foreign labor I make $600k versus $300k using U.S. workers. It is a no brainer to outsource jobs
Under my rules: I make $300k foreign workers, $320k U.S. workers
That will bring back jobs
AND the U.S. government makes $560k of tax versus $300k of tax
At Azabu Foods, our model depends on cross-border collaboration, sourcing high-quality Japanese and producing our flagship product in Japan while building everything else here in the US. Policies like this don’t just disrupt logistics, they undercut the creativity and innovation driving new food brands forward.
All my startup friends in the CPG space importing from Asia, especially Japan, are definitely scrambling even more right now.
The solution. No tariffs $20k per U.S. worker tax credit
Costs of Unemployed/Underemployed U.S. Citizens
Unemployed U.S. citizens cost the government billions annually. Here’s the breakdown:
Social Security Disability: $150 billion
Medicaid: $871 billion
Food Stamps: $120 billion
Welfare: $1,200 billion
Earned Income Tax Credit: $80 billion
Total Cost: $2.421 trillion
The Simple Math
Value of an Employed U.S. Worker: Approximately $20,000 per employee.
This includes taxes, healthcare, Social Security contributions, etc.
Proposed Policy Changes
Double the U.S. Tax Rate on Corporate Profits: Increase from 25% to 50%.
Tariffs for Compliance Only:
Apply tariffs solely to enforce EPA and OSHA standards (clean environment, safe workers).
Tariffs should match the compliance costs or mirror foreign tariffs.
Economic Impact Summary
Current Rules (Outsourcing Incentive):
Foreign Labor: Net profit = $600,000
U.S. Labor: Net profit = $300,000
Conclusion: Outsourcing is more profitable, encouraging job loss.
Proposed Rules (U.S. Worker Incentive):
Foreign Labor: Net profit = $300,000
U.S. Labor: Net profit = $320,000
Government Tax Revenue: Increases from $300,000 to $560,000
Conclusion: U.S. jobs become more attractive, bringing back employment.
Simplified Math Examples
Using Foreign Labor (Current Rules)
Item Amount
Sales $1,500,000
Labor (25 workers @ $20k) $500,000
SG&A $200,000
Gross Profit $800,000
Tax @ 25% $200,000
Net Profit $600,000
Using U.S. Labor (Current Rules)
Item Amount
Sales $1,500,000
Labor (12 workers @ $75k) $900,000
SG&A $200,000
Gross Profit $400,000
Tax @ 25% $100,000
Net Profit $300,000
Using Foreign Labor (Proposed Rules)
Item Amount
Sales $1,500,000
Labor (25 workers @ $20k) $500,000
SG&A $200,000
Gross Profit $800,000
Tax @ 50% $400,000
Compliance Tariff $100,000
Net Profit $300,000
Using U.S. Labor (Proposed Rules with Tax Credit)
Item Amount
Sales $1,500,000
Labor (12 workers @ $75k) $900,000
SG&A $200,000
Gross Profit $400,000
Tax Credit ($20k/worker) $240,000
Taxable Profit $160,000
Tax @ 50% $80,000
Net Profit $320,000
On Fri, Apr 4, 2025 at 8:19 AM Philip Sugar <philipsugar@gmail.com> wrote:
---------- Forwarded message ---------
From: Philip Sugar <philipsugar@gmail.com>
Date: Thu, Mar 20, 2025 at 5:47 PM
Subject: US Tax Structure
To: Philip Sugar <philipsugar@gmail.com>
I wrote the WSJ and Trump here is the huge cost. We have discussed. Format not great in text. You don’t need tariffs.
If you look unemployed US citizens cost in Billions
$150 Social Security Disability
$871 Medicaid
$120 Food Stamps
$1,200 Welfare
$80 Earned income tax credit
That is $2.421 Trillion for cost of U.S. workers unemployed/underemployed.
The simple math
Summary: Having an employee in the U.S. versus not is worth $20k an employee. They pay tax, healthcare, social security, etc.
Double the U.S. tax rate on corporate profits
Tariffs should only be for compliance. I.e. EPA and OSHA rules. We need a clean environment and safe workers show your costs and we provide a tariff for only those. Or a tariff equal to yours.
Summary:
Under current rules in my example if I use foreign labor I make $600k versus $300k using U.S. workers. It is a no brainer to outsource jobs
Under my rules: I make $300k foreign workers, $320k U.S. workers
That will bring back jobs
AND the U.S. government makes $560k of tax versus $300k of tax
Simplified math:
Using Foreign Labor
Sales: $1,500,000
Labor $500,000
(25 workers at $20k)
SG&A. $200,000
Gross Profit: $800,000
Tax @25%. $200,000
Net Profit: $600,000
Using US Labor
Sales: $1,500,000
Labor $900,000
(12 workers at $75k. More productive)
SG&A. $200,000
Gross Profit: $400,000
Tax @25%. $100,000
Net Profit: $300,000
UNDER US WORKER TAX CREDIT
Using Foreign Labor
Sales: $1,500,000
Labor $500,000
(25 workers at $20k)
SG&A. $200,000
Gross Profit: $800,000
Tax @50%. $400,000
Compliance Tariff: $100.000
Net Profit: $300,000
Using US Labor
Sales: $1,500,000
Labor $900,000
(12 workers at $75k. More productive)
SG&A. $200,000
Gross Profit: $400,000
Tax Credit: $240,000. $20k Per worker
Taxable Profit: $160,000
Tax @50% $80,000
Net Profit: $320,000
Appreciate this perspective, Brian.
At Azabu Foods, our model depends on cross-border collaboration, sourcing high-quality Japanese and producing our flagship product in Japan while building everything else here in the US. Policies like this don’t just disrupt logistics, they undercut the creativity and innovation driving new food brands forward.
All my startup friends in the CPG space importing from Asia, especially Japan, are definitely scrambling even more right now.