Proving that the Middle Class Lax Tax wouldn't relax now that Trump is grinding this ax and worse if he takes it to the Max. Bad news for American pax.
Even a blind man can hit the dartboard’s bull’s eye on occasion. Someone please tell me one thing Trump has done that has actually helped anyone other than himself, Putin, and his equally soulless, wealthy base and cronies. Tragically, even his middle American base is being adversely impacted by his irrational, self-serving, capricious policies. To say he uses sophistry and “pretzel logic” is a disservice to all the shiesters and con artists who preceded him. At least they had some native intelligence and were much harder to catch in a blatant lie.
Unlike the authors of this study, I am not an economist but this strikes me as very poor research. I noticed for instance no mention of the fact that these 25% tariffs on $200 billions of goods will produce a windfall to the US Treasury of $50 billion (200 x 25% = 50), paid by Chinese corporations, not Americans. This will allow the government to either (a) cut taxes, (b) increase services, (c) pay down the debt or (d) some combination of these to the tune of $50 billion.
Assuming 125 million households in the US, the tariffs will produce a windfall of $400 per household. That dwarfs the $60 extra we will pay for goods. Why doesn't the story even mention this?
It is sad to witness this rise of one sided reportage at the NY Times, consistently enhancing one side of the debate while ignoring the other. I recall when the Grey Lady was more evenhanded, and more consistently trusted throughout our country. Maybe once Trump is gone that older Lady will return. But that day will happen sooner if we are rigorous in reporting on what he is doing.
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@Rick
There's nothing wrong with The Grey Lady's reporting on tariffs because you're totally misinformed about who pays Trump's 25% import tariffs imposed on products from China. It's paid by US companies that import from China and subsequently passed onto retailers and consumers here in America. Chinese companies likewise pay whatever tariffs China retaliated with on products they import from the US. US companies pay US tariffs on Chinese imports. Chinese companies pay China's retaliatory tariffs on US products.
Apple will pay 25% on every I-Phone it makes in China and retails in the US. On an $800 phone, Apple pays $200 in tariffs to US Customs and most likely passes the entire tariff onto the end purchaser by pricing new phones at $1,000, which will significantly reduce sales or buyers will opt for cheaper phones like Samsung or HTC, which aren't subject to punitive tariffs so they can retail for much less than Apple phones.
The $50 billion you calculate as a Treasury windfall comes straight out of the pockets of US consumers, retailers, corporate revenue, profit margins and stock ROI. Because businesses deduct taxes and tariffs from their federal tax bill, $50 billion in tariffs will drop corporate tax rates and federal revenue. Investment funds holding Blue Chip Apple stock will see the value of their shares drop and retirees will see lower dividends.
Trump says Trade Wars are easy to win. He didn't say by whom. Because it sure ain't us.
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pretty clear you don't understand from whose wallets tariffs are paid. Other than that, great point!
A popular talking point has been that these tariffs will hit voters in the heartland particularly hard, which is poetic justice because many of these people voted for Trump. The message is that these voters deserve to get their just desserts. When the cost to the typical American family is something around $60 per year, the outrage over the current level of tariffs is starting to just look like a concern over corporate profits.
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"Tariff" is just another word for tax.
Trump and the Republicans have raised everyone's taxes, and trust me, the rich aren't picking up this tab.
Tax and spend Republican style.
$60-120 per household per year? Seems a minimal cost to protect critical industries from (unfair) overseas competition. Yes, yes, there may be job losses in industries that rely on Chinese imports as manufacturing feedstock. However, for most consumer goods in the US, the cost of raw materials or even manufactured inputs is a small fraction of the total cost the consumer sees. These numbers suggest that such costs passed on to consumers will be barely noticeable. Over, this seems a small price to pay to encourage skilled job preservation and growth and to put upward pressure on wages across the board.
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@BlueNorth
I applaud your optimism but it's misplaced. The dollar cost to households -- which is a very rough estimate that fails to account for network effects, less economic activity from even small price spikes, job losses as markets contract, lower sales taxes for states and localities, reduced r&d budgets, lost share value as sales drop, and across the board reduction in tax revenue as businesses deduct import tariffs from their tax bills.
There's no way an estimated $50 billion in import tariffs - paid by US companies, retailers and consumers -- won't ripple across all sectors. Midwest Soy Bean farmers will go bust as their secure China markets switch sourcing to Brazil and smaller producers that will plant more acreage -- and regardless of how the trade war ends -- there will be a Soy surplus that will drop prices for the next two or three years and wipe out most US soy growers.
Trump will push subsidies to bail out growers that will cost taxpayers billions on top of lost tax income from prosperous farmers. Growers unable to pay off crop loans will strain small community banks, which in turn will make local economies more precarious.
Skilled American jobs once lost to off-shoring are now automated. If anything comes back it'll be robots and computer-operated factories. Assembling lawn mowers no longer pays $30 an hour with a healthplan.
Tariffs are a better IQ measure than Stanford Binet. Higher the tariff, the lower the intelligence.
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$60-120 per household per year may not seem like much, but you are literally talking about net reduction in national income, so it makes absolutely no sense.
Econ 101
Costs are the difference between outlays and gains
Mr Bui and Erwin cover the first, but not the second
E.g. Some families will see wage gains as competition from low wage countries is reduced. Others, such as steel workers might move from unemployed to employed as their jobs return
For example Shannon Mulcahy
See NYT Oct 8, 17
"Becoming a Steelworker Liberated Her. Then Her Job Moved to Mexico.
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>Others, such as steel workers might move from unemployed to employed as their jobs return
Conversely, others might move from employed to unemployed as price increases reduce demand for the products they produce.
Not to be coy, I think tariffs might have helped manufacturing 25+ years ago when we had a significant manufacturing base, i.e., pre-NAFTA and pre-GATT. I don't anticipate that tariffs will have a positive effect now that those jobs have been off-shored.
The future of good jobs in the US isn't in mid-20th century industries and technology. The world is different now than it was a few decades ago and it ain't going back not matter how much we yell, scream, and stomp our feet. We need to adapt accordingly.
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