Tariffs, Taxes, and Conscious Economics: Why 21st-Century Policy Needs a Systems Thinking Upgrade

By Sasha Tanoushka | sashatanoushka.com

In recent academic circles, a familiar yet provocative idea has resurfaced:

Could tariffs on imports be used to reduce income taxes?

Historically, this wasn’t so unusual. Before the U.S. introduced the federal income tax in 1913, tariffs were a major source of government funding. Even today, many smaller economies lean heavily on trade taxes to fund their operations. In theory, higher tariffs could ease the tax burden on individuals and businesses, especially lower and middle-income earners.

Yet in our interconnected, fast-moving global economy, reviving this model isn’t as simple as it sounds.

Tariffs and income taxes serve distinct purposes.

One regulates external trade flows; the other shapes internal wealth distribution. Attempting to substitute one for the other overlooks the complexity of modern economies — and the deeper shifts humanity is being called to make.

The Limits of Old Solutions in a New World

From a purely fiscal standpoint, using tariffs to replace income tax revenue has significant limitations:

• Tariff revenues are volatile, rising and falling with global trade cycles.

• Income taxes are progressive and stable, essential for social equity.

• Global supply chains are deeply integrated, meaning high tariffs could raise prices for consumers and trigger retaliatory trade wars.

Simply put, while targeted tariffs on luxury goods or environmentally harmful products could supplement income tax revenues, a wholesale replacement is neither practical nor desirable.

But the bigger issue goes beyond feasibility.

From Transactional to Transformational Thinking

In the 21st century, systems thinking must replace the outdated habit of searching for one-dimensional fixes to multi-dimensional problems.

We live in a world where:

• Economies, ecosystems, and societies are inseparably linked.

• Local actions ripple globally within seconds.

• Resilience and regeneration are becoming core to survival and flourishing.

A conscious economy does not simply ask, “How do we raise revenue?”

It asks, “How do we design systems that steward life — human and non-human — across generations?”

Tariffs, taxes, subsidies, and incentives are not just tools for balancing budgets. They are instruments that either reinforce outdated extractive systems or build regenerative ones.

A New Purpose for Tariffs?

Rather than discarding tariffs or clinging to them nostalgically, we can reimagine their purpose:

• Green tariffs (such as carbon border adjustments) could penalize pollution-intensive imports while funding renewable energy transitions.

• Luxury tariffs could moderate excessive consumption patterns and fund universal access to education, healthcare, and clean energy.

• Ethical trade incentives could reward companies and countries that uphold human rights, environmental stewardship, and regenerative practices.

In this vision, tariffs are no longer merely economic levers — they become ethical signals, shaping a more conscious global economy.

The Call Forward

It is easy to debate fiscal policy in isolation. It is harder — and more necessary — to evolve our economic systems from mechanisms of accumulation to expressions of care.

Every dollar taxed, every product traded, every policy enacted is an opportunity to either deepen fragmentation or nurture connection.

​Herman Daly (1938–2022) was a pioneering American economist who fundamentally reshaped how we think about the relationship between the economy and the environment. As a founder of ecological economics, he challenged the mainstream obsession with endless growth, arguing instead for a "steady-state economy"—one that operates within the planet's ecological limits while prioritizing well-being, equity, and sustainability. Daly served as a senior economist at the World Bank from 1988 to 1994 and was a professor at the University of Maryland. His contributions earned him the Right Livelihood Award in 1996 for "defining a path of ecological economics that integrates the key elements of ethics, quality of life, environment and community.​

In his lecture "Toward an Ecological Economics," Daly critiques the traditional focus on perpetual economic growth, highlighting its incompatibility with the finite resources of our planet. He advocates for a steady-state economy, emphasizing the need to balance economic activity within Earth's ecological limits. Daly proposes mechanisms such as implementing resource depletion quotas and reforming tax systems to prioritize sustainability over consumption. His insights underscore the importance of conscious economic design that respects environmental boundaries, aligning with principles of sustainable tariffs and mindful resource management.

The future does not belong to those who tweak old models for short-term gain.

The future belongs to those who see economies not as battlefields, but as living ecosystems, and who have the courage to reimagine them accordingly.

About Sasha Tanoushka

Sasha Tanoushka is a systems thinker, hypnotherapist, and neuroacoustics coach devoted to helping individuals and organizations awaken their highest potential. She believes true prosperity begins with conscious design — in mind, body, and society.