Trumps tax cuts primarily benefited the super-wealthy. His tariffs are taxes on consumers, which means primarily you and me. Typical Republican strategy -- cut taxes for the rich, raise taxes on workers and the middle class. |
President Trump’s new tariffs on Chinese imports, which took effect at 12:01 a.m. on Friday, are taxes that will be paid by Americans. That is a simple fact, and it remains true no matter how many times Mr. Trump insists the money will come from China.
Mr. Trump continues to repeat the false claim that the money will come from China, even though he has been told repeatedly that this claim has no basis in fact. He is willfully peddling a falsehood for political gain. The mechanics of tariffs are not complicated: The government sends a tax bill to the company that brings goods into the country. Most of those tax bills go to American companies, often import firms that specialize in dealing with the customs process. It doesn’t really matter who gets the bill, however. The important question is where the money to pay it comes from. And in broad terms, there are only two options: It comes either from the firms that make, move and sell the products or from the pockets of the buyers. Consider the case of washing machines. In January 2018, Mr. Trump imposed a tariff on washing machines, initially at a rate of 20 percent. The tariff caused a 12 percent increase in the price of washing machines, according to a study by economists at the Federal Reserve and the University of Chicago. It also resulted in a similar increase in the price of dryers. {T}he tariffs are proving painful. The second study estimated that tariffs were extracting $3 billion a month from American companies and consumers {A} tariff is a consumption tax, much like a sales tax, and such taxes tend to be regressive, meaning they cost lower-income families a larger share of their income than they cost upper-income families. There are better ways to raise the money. For example, the ill-considered tax cuts for the wealthy that Mr. Trump pushed through Congress in 2017 could be reversed. Source: "Trump’s Tariffs Are a New Tax on Americans" - NY Times - 5/10/19 The more President Trump escalates his trade war with China, the more American shoppers will notice higher prices in their favorite grocery stores, hardware shops and big-box retailers. Economists and business owners expect the tariff increases to hit consumers in two ways. Stores that were already passing on the cost of the 10 percent tariffs will now pass on a higher cost. And businesses large and small that previously tried to shield customers from the smaller tariffs will now find it almost impossible to avoid passing some or all of that tax on to Americans who buy their products. A quarter of the tariffs were placed on items that researchers at the Peterson Institute for International Economics classified as consumer goods. They include $11.3 billion in furniture imports, $9.2 billion in auto parts and $6.6 billion in luggage. The National Retail Federation warned this week that consumers would bear the costs of an abrupt increase in the taxes on those goods. Among the items that might suddenly get more expensive is outdoor gear, like travel bags, backpacks and the knit fabric used in fleece vests. Dog collars, baseball mitts and ski gloves will also face a 25 percent tariff, along with sledgehammers and saw blades. Almost every kind of lighting fixture that most American stores sell is imported from China, and all are on the list. Also on the tariff list are toilet paper, art supplies, ceramic tiles, windshield glass and antiques that are more than 100 years old. Plus:
The worst may be yet to come. Mr. Trump said Thursday that he was preparing another round of tariffs, on what could be all remaining imports from China. They would presumably hit clothing, shoes and other goods that the administration has worked to leave off the lists until now. It would be impossible for shoppers to miss it. Source: "How Trump’s Tariffs on Chinese Goods Will Hit Your Shopping Cart" By Jim Tankersley - NY Times - May 10, 2019 |
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