| Trump's latest round of edicts, when you connect the dots, are designed to shift the tax burden from the wealthy to consumers. |
| Trump's real goal -- along with the goal of the cadre of billionaires who paid for his campaign -- is to extend the tax cuts he passed during his first term. Those tax cuts overwhelming benefited the ultra-wealthy. (Nearly half will go to the wealthiest 5 percent of Americans, at a hefty cost of $4 trillion over the next decade.)
Of course when you cut taxes, you reduce federal income. Unless you significantly make corresponding cuts in spending (which neither party ever actually does), you have to borrow money to make up the difference. In other words, increase the federal debt. (Neither party ever actually approaches spending cuts seriously. Although the recent attempts by Elon Musk to decimate many federal agencies may, if successful, prove to be an outlier.) There are a significant number of Republican congress people, and some Democrats, who refer to themselves as "deficit hawks." They cast their votes with the intent of limiting the amount of money the federal government borrows. They are reluctant to vote for any measure that increases the deficit. This would of course include extending the Trump tax cuts. Because both the House and Senate are narrowly divided along party lines, the Republican majority can only afford to lose a few votes and still pass legislation. So in order to get enough votes in congress to extend the tax cuts, Trump must come up with a way to at least partially offset the billionaire tax cuts. Trump campaigned on eliminating illegal immigration and deporting as many of the 11 million undocumented immigrants as possible. His rational was that they are "criminals and rapists" among other things. (Ironic since Trump himself is a convicted criminal and convicted of sexual assault. That's called "projecting.") As he campaigned, he observed that those remarks generated lots of applause, which he correctly interpreted as policy proposals that would help him get elected -- which they did. Does Trump care one whit about illegal immigrants? Of course not. He's known to have hired illegal immigrants at his resorts. And does he care about a laid-off coal miner in Kentucky who dies of a Fentanyl overdose? Really? (Nor does he care about housing costs, child care costs, higher education costs, prescription drug costs or health care costs. And when do you think Trump last bought a dozen eggs at a grocery store?) Railing against immigrants has two benefits for Trump. One, as we've acknowledged, was to help him get elected. But there's a second, more devious reason. It provides a rational for imposing tariffs on Mexico and Canada. (Yes, somehow even Canada!) Those tariffs are essentially taxes on people who spend money on imported products. Those tariffs will be passed along the supply chain until they reach the end of the chain -- consumers. For example, around half of the fruits and vegetables in our grocery stores are imported from Mexico. A 25% tariff on those products will raise their cost at the check out counter by around that amount -- 25%. The operators of the supply chain will pass those increases to the federal government in what amount to a consumer tax. That reality is acknowledged by virtually every responsible economist, no doubt including every one that advises Trump. Of course he knows that American consumers, not foreign governments will pay those taxes. Those tariffs will at least partially offset the billionaire's tax cuts, which will make it easier for the deficit hawks in congress to approve them. When you connect the dots, this is the rational behind Trump's hysteria around illegal immigration. It has nothing to do with illegal immigration or Fentanyl. It's all just a plot to shift the federal tax burden from the ultra-wealthy to middle class consumers. When you want an explanation for anything, "follow the money." |
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