Raw: [
- Donald Trump’s Income Tax Cut Would Cost Average Family $5,000—Economist Newsweek
- Trump Suggests Tariffs Hikes to Pay for Some Income Tax Cuts Bloomberg
- Trump floats eliminating U.S. income tax and replacing it with tariffs on imports CNBC
] {Article Source: https://www.newsweek.com/donald-trump-income-tax-cut-would-cost-average-family-5000economist-1912874}
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Politics Donald Trump2024 ElectionIncome taxTariffsRepublicans
Donald Trump’s Income Tax Cut Would Cost Average Family $5,000—Economist
Published Jun 14, 2024 at 11:10 AM EDT
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Darragh Roche
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Former President Donald Trump’s idea of imposing tariffs in order to abolish income tax could raise taxes for a typical American family by $5,000, according to an economist from the Center for American Progress Action Fund.Brendan Duke made the claim in posts on X, formerly Twitter, on Thursday following reports that Trump had raised the idea of using tariffs to replace income tax revenues. Duke served as senior policy adviser at the White House National Economic Council and a volunteer on the Biden-Harris transition team.The former president reportedly floated introducing an “all-tariff policy” that would allow the federal government to eliminate income tax during a private meeting with Republican lawmakers at the Capitol Hill Club in Washington, D.C., on Thursday.
Former President Donald Trump, the presumptive Republican presidential nominee, speaks during a press conference at Trump Tower on May 31 in New York City. The former president reportedly suggested replacing income tax with a tariff…
Former President Donald Trump, the presumptive Republican presidential nominee, speaks during a press conference at Trump Tower on May 31 in New York City. The former president reportedly suggested replacing income tax with a tariff policy.
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David Dee Delgado/Getty Images
Trump has long advocated using tariffs as a foreign policy tool, but several economists were quick to question the viability of replacing income tax with an all-tariff approach.Newsweek has reached out to the Trump campaign via email for comment.”There is no tariff that could replace revenue from $2T of income taxes by taxing $3T of imports,” Duke wrote on X, adding, “If you did somehow manage to pull this off, it would be a big tax increase for the bottom 90% and tax cut for the wealthy.””Another way to put Trump’s latest (incredibly unworkable idea): 1.) It would raise taxes by $5,000 for a typical family 2.) It would cut taxes for the average family in the top 0.1% by 1.5 million dollars,” Duke added in another post.”One final point–this is probably an UNDERESTIMATE of how much this would benefit the wealthy at the expense of the middle class. I assumed that it’s workers and U.S. companies–not consumers that pay it–because the methodology is easier,” he went on.In a statement sent to Newsweek on Friday, Duke said: “Donald Trump has released multiple economic plans, but they all have one bottom line: paying for tax cuts for billionaires and corporations by raising taxes on American families.””Yesterday’s proposal was mathematically impossible, but regardless of what his final plan is we know that he views the American consumers as a piggybank for him and his wealthy friends,” he added.The Center for American Progress Action Fund describes itself on its website as “an independent, nonpartisan policy institute and advocacy organization that is dedicated to improving the lives of all Americans through bold, progressive ideas, as well as strong leadership and concerted action.”Duke was not the only economist who drew attention to report, with Nobel Prize-winning economist Paul Krugman also raising questions about a tariff policy, writing on X: “Trump has reportedly floated the idea of replacing income taxes with tariffs. I’ll have to write this up in detail, but my first-pass estimate is that this would require an *average* tariff rate of 133 percent.”Krugman later wrote a thread sharing some calculations that led him to the figure of 133 percent.”Imports are about 14 percent of US GDP. Federal income tax revenue (not including payroll taxes) is about 8%. So you might think replacing it would require a tariff rate of 8/14 or around 57 percent. But … Tariffs would raise the cost of imports to consumers, so we’d import less, which would mean you need a higher tariff rate. But this reduces imports further, meaning a still higher tariff, and so on,” Krugman wrote.He went on to argue that a rate of 133 percent or higher could be necessary, before mentioning past use of tariffs.”So how is it that in the 19th century the federal government largely paid its way with tariffs? Because back then the government was much, much smaller. Believing that we can go back to those days is just ignorant,” Krugman said.In March, Trump said he wanted to use tariffs to encourage China to make cars in the U.S”The whole topic of tariffs is so simple. No. 1, it’s great economically for us, and it brings our companies back, because if you charge tariffs to China, they’re going to build … their car plants here and they’re going to employ our people,” Trump said.”We don’t want to get cars from China. We want to get cars made by China in the United States using our workers.”
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Darragh Roche
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Darragh Roche is a U.S. News Reporter based in Limerick, Ireland. His focus is reporting on U.S. politics. He has covered the Biden administration, election polling and the U.S. Supreme Court. Darragh joined Newsweek in 2020 from PoliticusUSA and had previously worked at The Contemptor. He attended the University of Limerick, Ireland and ELTE, Hungary. Languages: English, German.You can get in touch with Darragh by emailing d.roche@newsweek.com.
Darragh Roche is a U.S. News Reporter based in Limerick, Ireland. His focus is reporting on U.S. politics. He has …
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