TRUMP’S TARIFF’S WIPED OUT TAX CUTS
June 16, 2019 - Douglas Myser
Trump's tariff's wiped out tax cuts. That last $100 in tax cut gains could soon completely disappear--and then some-- because of additional tariffs Trump has announced if the president makes good on his threats to impose levies on virtually all imports from China and Mexico, those middle earning households could pay nearly $4000 more each. Trump's tariff's wiped out tax cuts. Subtract the tax cut, and the average household will effectively be paying about $3000 more in taxes through additional levies on the products they consume. "It's giving with one hand and taking with the other," said Kim Clausing, an economics professor at Reed Tax Policy Center in Oregon, who has written a book promoting free trade. Trump's tariff's wiped out tax cuts.
Here's how the math works. Middle earners got an average tax cut of $930, according to the Urban Brookings Tax Policy Center. The tariffs already in effect cost the average household about $831, according to research from the New York Federal Reserve. And in the additional tariffs on another $300 billion in Chinese goods that Trump proposed in May ad that increase the cost for the average family of four to about $2,294 annually, according to research from Tariffs Hurt the Heartland, a coalition of business groups that oppose tariffs.
Trump has also threatened to levy tariffs on all imports from Mexico, starting with a 5% tax beginning soon, that would increase to 25% by October, if the tariffs reach their highest levels that would increase costs for households by $1700 annually, according to Gary Hufbauer, a senior fellow at the centrist Peterson Institute for International Economics. The full force of the Chinese and Mexican tariffs and subsequent retaliation would mean that consumers are paying an additional $3994 because of tariffs, more than four times the $930 tax cut for middle earners that the Republican Party touts as its signature legislative achievement.
The tariffs are clearly diminishing the benefits of the tax cuts for both businesses and individuals. If the IRS tax cuts didn't help you, and you ended up owing taxes as a result of losing a job, or a life circumstance, contact this 35 year old Tax Resolution firm for Tax Relief options in the IRS Code, including but not limited to the IRS Fresh Start Program. We can help you move on financially.