A new study finds that Donald Trump’s economic plan would raise taxes on poor and middle-class Americans by $1,700 a year.
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A Peterson Institute for International Economics study of Trump’s tariff plan found:
Presidential candidate Donald Trump has proposed reducing U.S. reliance on income taxes while increasing reliance on import tariffs. He proposed extending the tax cuts that expired in 2017 and suggested the possibility of implementing a new round of tax cuts. At the same time, he also proposed imposing a “comprehensive” tariff of 10% on imported products from China, and a tariff of 60% or higher.
Together, these policy measures amount to regressive tax cuts, but are paid in part through regressive tax increases. The tariffs would reduce after-tax income by 3.5% for people in the lower half of the income distribution and increase taxes by about $1,700 per year for a typical household in the middle of the income distribution. If implemented, these measures would add to the distortions and burdens created by the multiple rounds of tariffs imposed during the first Trump administration (and continued under the Biden administration) while causing massive collateral damage to the U.S. economy.
Trump has long claimed that his tariff plan will not harm the economy because he has distorted how tariffs work. Trump claims that countries that are subject to tariffs bear the cost, but the reality is that tariffs raise prices for American consumers.
If Trump wins the election and implements his tariff plan, it will increase the tax burden on poor and middle-class families. The ten percent tax is not paid by China, but by American consumers. With inflation lingering, Trump has proposed a plan that would plunge the U.S. economy into recession.
Someone has to pay for Trump’s planned massive tax cuts for the rich, and it will be the poor and middle class who will be hit with the bill.
Jason is the managing editor. He is also a member of the White House press corps and a congressional reporter for PoliticusUSA. Jason holds a BA in Political Science. His graduate work focused on public policy, particularly social reform movements.
Awards and Professional Memberships
Member of Society of Professional Journalists and American Political Science Association
