The nineteenth century political economist, Henry George, offered a wise admonition: “No other nation can thus injure us so much as we shall injure ourselves.” This principle applies equally to state and local governments — and it’s a fundamental lesson for policymakers everywhere.
Denver Mayor Mike Johnston recently proved George’s Rule when floating a 20% service charge on restaurant bills, asserting that “you can spread it equally across all the employees.”
“(I)nterestingly for us,” he boasted, “if you add a service charge, that comes above the line in the bill, which means it’s also taxed. So, if you had a $100 tab, and now you put a 20% service charge, you pay $120, and we tax $120.” Tax revenue, he insists, could then be shared “back with the restaurants.”
The Common Sense Institute found this surcharge could reduce Denver’s GDP by up to $718 million and purge 4,575 jobs by 2030. Yikes.
Let’s be real: For a city where 22% of restaurants have shuttered in three years, this may be Denver’s dumbest idea yet. Does Johnston seriously think this is how to revitalize 16th Street Mall? Denverites would be far better off if he’d just stick to performative bartending.
A restaurant surcharge or a trade tariff might feel good at first, but the costs always trickle down. As Milton Friedman put it, businesses don’t pay taxes — people do. “Corporate officials may sign the check,” he wrote, “but the money that they forward to Internal Revenue comes from the corporation’s employees, customers or stockholders.”
The same goes for tariffs. Countries don’t pay them — and companies can absorb the costs only so long before passing them on. Yet President Trump’s new tariffs — 25% on most Canadian and Mexican goods and 20% on Chinese imports — reflect his zero-sum view of international trade.
“Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another,” Friedman explained. This captures Trump’s mindset: we’re losing, they’re “eating our lunch,” and we must stop it.
Except trade, by definition, means a mutually beneficial exchange — not force or coercion. As George put it, “There cannot be a trade unless the parties to it agree.” The real losers are consumers when governments interfere through destructive trade wars.
Import taxes inflict very real costs that hit home. Trade Partnership Worldwide reports Colorado imported $17 billion in goods last year. Canada, Mexico and China constitute nearly half of that. The firm estimates Trump’s tariffs could cost Colorado an additional $1.4 billion annually — quadrupling 2024’s $459 million sum — hammering crucial industries like restaurants and craft breweries.
The 25% steel and aluminum tariffs alone could cost Colorado importers $35 million. Products using those inputs will cost more — hitting companies like Westminster-based aluminum manufacturer Ball Corp, which sources aluminum from Canada. And there are many more American jobs in aluminum-using industries than aluminum-producing industries.
“As an ops manager for a company that ships hundreds of thousands of pounds of aluminum a day to Novelis for beer cans and Ford truck bodies, it’s not hard to see that these tariffs will hurt the consumer,” said Dan Vigneault, a veteran of Canada’s trucking industry. “America doesn’t produce enough aluminum to maintain Ford’s F150 needs, so the options are China, Russia, India or Canada. Only one is a steadfast ally — and only one doesn’t involve the costs of shipping overseas.”
Then there’s retaliatory tariffs. Nearly 6,000 Colorado companies exported a record $10.5 billion in goods in 2024, mostly to our neighbors. The Colorado Corn Council reports China’s 15% retaliatory corn tariff is already forcing price hikes — risking decades of work opening Chinese markets to American producers.
How can businesses and investors make long-term plans in such a turbulent economic environment? In 2019, Trump called his US-Mexico-Canada Agreement (USMCA) the “best and most important trade deal ever made by the USA.” Now, he’s disregarding his own deal based on tariff justifications that seem to change daily.
Boost American manufacturing! Stop fentanyl trafficking! Shrink the trade deficit! Raise federal revenue! It’s a policy grab-bag where everyone finds their favorite reason to support it.
Let’s be honest: Those concerns may be valid, but no trade deal can address all of them simultaneously. Meanwhile, the substantial costs will hit those of us already struggling to pay for groceries, including people who voted for President Trump believing he would help lower costs, not exacerbate them. The administration must pick a goal, stick with it and start cutting deals — giving markets the clarity, consistency and certainty they need.
Tragically, economic fallacies remain a bipartisan pastime. From Trump’s trade war to Johnston’s restaurant surcharge, they’re all burdens draped in virtue while throttling prosperity. Enough meddling. Let us pay our bills without artificially inflating costs evermore under the pretense of saving the day.
Jimmy Sengenberger is an investigative journalist, public speaker, and longtime local talk-radio host. Reach Jimmy online at Jimmysengenberger.com or on X (formerly Twitter) @SengCenter.
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