Higher tariffs go into effect Thursday

Not if you're talking about Trump's tax policies as a whole. According to the Trump admin, Trump's tariffs will increase tax revenue by $600 billion per year. That's a huge tax increase. Who do you think is paying for that?

 

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The reality is that those on the bottom end will be swamped by tariffs, people who basically live paycheck to paycheck. Their income is too low to receive a meaningful enough tax savings to offset tariffs. Even the median earner “only” benefits $2900, so given the anticipated tariffs are going to increase goods by roughly the same (I see bunch of estimates that peg the avg tariff impacts on households in the $2400 range), the average person will either slightly lose or slightly gain (assuming the general economy remained stable and isn’t driven off a cliff). So truly it is not a lie to suggest this tax cut mostly benefits “the rich”, but with this one it is especially so because of the regressive nature of tariffs.

Saw a thing where low income seniors get hurt the worst, their taxes will INCREASE $10 due to lost health care subsidization before they even get into tariffs. So any tariff impact will be straight additional pain for them with zero offset.

 

Yeah, groceries going up even 3 percent means a heck of a lot more percentage wise to someone making 40k vs 400k.

 

Had to replace tools that were stolen -- prices on some have tripled from 3 years ago.
Soooo nice to know that whatever I pay will be going towards lord-knows-what in the federal budget.

 

Mostly the working part of the country…primarily the republicans.

 

This is as I see it. And over time, it will be tough for a lot of hard working people. I’m surprise there isn’t more concern over this.

 

That is a bit like claiming that products don't cost money because I could always choose not to buy a product and I have money. It is nonsensical.

You can't assume dynamics only on one side (which you are). You are assuming (possibly without realizing it) that the tax cut is non-dynamic while allowing dynamics only on the consumption side.

Regardless, tariffs are particularly pernicious as a tax specifically because they cause increases across multiple decisions. I could pay the tax from my current consumption, I could pay it through substitution in the form of decreased competition (i.e., increased prices for less preferred products), or I could pay it in lower consumption. Each of those is a decrease in my utility as a consumer.

 

If you wanted. You could go off grid and be a hermit living in a cave never buying anything, and tariffs wouldn't effect you at all!

Of course, the common person isn't going to choose that option. And tariffs cause inflation. Often even for domestic products.

We've already seen CPI raise a few points to 2.7%. And it's expected to keep going up as the effects of the first round of tariffs are fully realized, and now the second set are here.

Bottom line is what's left in your wallet or bank account at the end of the day. If you spend $2k less on taxes, but your average spending bill goes up $2,500 because of tariffs, you have $500 less to spend any way you slice it.