Yahoo Finance Trump Tariffs Could Wipe Out Tax Cuts for Many Households
The tariff increases on Chinese imports ordered by President Trump could end up taking more money out of many low- and middle-income households than the Republican Tax Cuts and Jobs Act put in, says Howard Gleckman of the Tax Policy Center.
Trump’s trade war is still developing and could change course at any moment, making it hard to determine its cost to American consumers, but Oxford Economics says that if tariffs remain at current levels, they will cost the U.S. economy $62 billion a year, which translates to about $500 per household.
If the president imposes a 25% tariff on virtually all Chinese imports, as he has threatened to do, the U.S. economy would be about $100 billion smaller in 2020 than it would have been otherwise. That translates to about $800 per household – which “is roughly equal to the average TCJA tax cut for a middle-income household,” Gleckman says.
Low-income households would be hit much harder, since their annual savings from the tax cuts are about $40.
“Public opinion surveys showed most Americans thought they got no benefit from the TCJA’s tax cuts,” Gleckman writes. “Turns out, they may have been right—at least when those tax cuts are paired with the Administration’s trade policy.”
