June 20, 2024 ☼ trump ☼ tariffs ☼ taxes
Source: Atlantic (Link)
Economists are warning that Trump’s reported idea to eliminate the income tax and replace it with massive tariffs on imports would cripple the economy, explode the cost of living, and likely set off a trade war. And because the math doesn’t come close to working, it would also tremendously increase the national debt.
In other words, Trump’s latest notion is both economically and fiscally illiterate. “If a 20yo interviewing for a House internship suggested replacing the income tax with a massive tariff, they’d be laughed out of the interview,” Brian Riedl, a conservative budget expert, wrote on X.
The politics of Trump’s latest scheme are perhaps even worse, because this plan exposes the hypocrisy of his faux populism. Indeed, what’s striking about the idea is just how regressive and non-populist it is. Replacing the income tax with tariffs would result in massive tax cuts for the ultrarich—at the expense of middle and lower-class Americans. Brendan Duke and Ryan Mulholland of the left-leaning Center for American Progress estimate that Trump’s proposal would raise taxes by $8,300 for the middle 20 percent of households, if American consumers end up bearing the full brunt of tariffs on imports.