As an investigative journalist, I’ve spent countless hours delving into the complexities of tax evasion and its consequences. Today, I want to shed light on a less obvious but equally significant form of tax burden – the trade war tariffs. Initiated by President Trump and continued by President Biden, these tariffs have had a profound impact on the American economy and its citizens.
President Trump instigated a trade war by imposing new tariffs on imports of various goods throughout 2018 and 2019. These new levies amounted to a tax increase of $80 billion a year. Surprisingly, more tax revenue from these tariffs has been collected under Biden than under Trump. Despite some minor modifications, President Biden has kept nearly all Trump tariffs in place.
While the static analysis indicates an $80 billion a year tax increase, trade levels have not remained the same since the tariffs went into effect. The trade war tariffs have raised customs duties collections by around $233 billion through March 2024. Of that $233 billion, just $89 billion was collected during the Trump administration. The remaining $144 billion has been collected during the Biden administration.
The vast majority of the increase in tax collections has come from the Section 301 tariffs on goods from China—$211 billion of the $233 billion. Contrary to political rhetoric, these tariffs are paid by people in the U.S. importing foreign goods. The economic burden of these higher tax payments has fallen almost exclusively on American consumers in the form of higher import or retail prices.
But the billions in added tax costs for Americans are not the only harm from the trade war. The 2018-2019 tariffs have had a net negative impact on the U.S. economy. Federal Reserve economists and other experts have found a decrease in manufacturing employment due to the tariffs. The positive contribution from protected industries was significantly outweighed by the effects of rising input costs and retaliatory tariffs.
Despite the higher costs falling on American consumers and the harms to U.S. employment and production, both the Trump campaign and the Biden administration have continued to defend the trade war tariffs. This is likely a reflection of the gap between economic reality and political messaging.
As we navigate the complexities of tax compliance, it’s crucial to understand the hidden tax burdens we face. The trade war tariffs serve as a stark reminder of the importance of informed financial decisions and the need for responsible financial citizenship. Stay informed, stay compliant, and contribute to the well-being of our communities by fulfilling your tax obligations.
For more insights into tax evasion and its consequences, stay tuned to TheTaxEvader.com.