October 15, 2024
If you’re not part of the mega-wealthy, get ready to pay more in taxes if Donald Trump wins the presidential election in November.
According to an Oct. 7 study by the nonprofit, nonpartisan Institute on Taxation and Economic Policy, 95 percent of Americans will see a huge jump in what they pay for goods if Trump installs his plan to impose stiff tariffs on imported goods.
What would the richest 5 percent of Americans see under Trump’s plan? You guessed it: a tax cut and little impact from the tariffs.
The report, titled “A Distributional Analysis of Donald Trump’s Tax Plan,” said that Trump’s tariffs proposal would negate any benefit that his proposed tax cuts might provide to all but the very richest households. Trump is proposing 20 percent tariffs on all imported goods, with a 60 percent tariff for goods from China.
“(Trump’s) proposed tariffs, which would be largely passed onto consumers as increased prices, would more than offset those tax cuts for all income groups outside the richest 5 percent,” the report said.
On its own, Trump’s tariffs proposal would make items much more expensive, especially for the middle class. Under his plan, middle class costs would rise between $3,370 and $7,400 annually, depending on household income. The wealthy would also pay more; anywhere between $12,400 and $42,000 depending on income.
But Trump’s proposed tax cuts, which heavily favor the rich, more than make up for any increases his tariffs plan would impose on the wealthy. Trump is proposing repealing green energy tax credits, cutting the corporate tax rate and extending his 2017 tax law—which also favored the wealthy. The tax law expires at the end of 2025.
The report also said that Trump’s increased tariffs plan would “massively disrupt the economy” and spike prices on imported goods. According to the study, there is “no coherent economic analysis” that the tariffs would be paid by foreign exporters—which means that the increased costs would be passed on to American consumers.