Tariffs and the Tax Cut - WSJ editorial
More than a few conservative intellectuals have warmed to Donald Trumps trade protectionism because it supposedly helps blue-collar Americans. But what if his tariffs do the opposite?
Erica York at the Tax Foundation crunched some numbers recently showing that Mr. Trumps proposal for a 25% tariff on imported cars, trucks and parts could eliminate half of the income gains from tax reform for millions of Americans. Those in the lowest income quintile could lose 49% of their tax gains. Say for ease of calculation that these folks received a $100 after-tax bonus from changes like the doubled standard deduction. After auto tariffs that would be whittled down to $51, Ms. York notes.
The tariffs shave gains in all income brackets, but no one is hurt more than the poor and middle class. Take the fourth income quintile, or a household making at most about $70,000 a year in adjusted gross income. The Tax Foundation says auto tariffs could erase nearly 30% of that familys after-tax income bump. Ditto for the third quintile, or a family earning no more than $43,000 a year.
Tariffs are inherently regressive because low-income Americans spend more of their income on household goods. Commerce Secretary Wilbur Ross has argued that no one will notice price increaseswhats a few cents more for a can of soup? But people in Mr. Rosss income strata are not the Trump base.
The Commerce Department is still looking at whether a muffler is a national security threat under Section 232 of the Trade Expansion Act of 1962. President Trump should abandon the idea lest Americans wonder if they really benefitted from that tax cut.
https://www.wsj.com/articles/tariffs-and-the-tax-cut-1528845173
Wellstone ruled
(34,661 posts)The Source tells us,here we go gang,more Propaganda. You have to look at the Math,talk about phony.
question everything
(47,487 posts)of their pay raise? Based on what?
Wellstone ruled
(34,661 posts)And if anyone thinks for five minutes,jobs are going to magically appear in a month or two. Forget about it. Takes five years to put the infrastructure together to produce one new Job.
By then,the Recession will be so deep that it will take massive Governmental Funding to stave off a total collapse of all Retail as well as most Banking . With most of the States adopting the Walker Scheme,it will look like 1929 all over again.
BTW,references to this Model occurring was talked about the day after the GOP Robin Hood Tax Bill was signed. And yes they mentioned the Tariffs which were planned by the GOP as a add on after they wipe out Social Security and Medicare.
Learn a long time ago,once Murdoch bought the WSJ,read it twice and think about it.