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When is a tax not a tax?

When it is called a tariff.

Republicans claim to be against tax increases. They attack anyone who they believe wants to raise taxes. And yet, they have ignored Trump’s tax increases. What increases? Donald Trump has, by executive fiat, levied taxes of up to 50% on goods being imported into the US, with the most common tariffs being 25%.

How does this differ from a tax? I can’t think of any substantiative difference. If you buy anything from China or other foreign nations, you will pay what is basically a sales tax to the federal government. Can you imagine the uproar if the government levied a sales tax of 25% on mobile phones, televisions, washing machines, solar panels, and other goods? Well, they have basically done that, and are threatening to tax those things even more.

And here’s the really interesting point. Sales taxes (including tariffs) are mainly paid by the middle class. The 1% don’t need to buy more than one iPhone or one washing machine, the same as working Americans. Not only do Trump’s tariffs fall disproportionately on poor and middle class Americans, they would hurt working Americans by reducing GDP, and cutting full time jobs by around 80,000.

On the other hand, the majority of the Republican tax cut at the end of 2017 benefitted the richest Americans and large corporations. After the tax cut was enacted, Treasury Secretary Steven Mnuchin claimed 90% of all working adults would see increases in their paychecks because of the cuts. But the it turned out to be that only 4.3% of workers saw a wage increase or even a one-time bonus because of the tax cut.

So the Republicans and Trump have given us a tax cut and a tax increase. Is anyone surprised that the tax cut went mainly to the rich, and the tax increase will be largely paid by working, middle-class Americans? Remember this the next time the Republicans claim to be against tax increases. They are against tax increases only for themselves.


Also published on Medium.

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2 Comments

  1. Jonah wrote:

    All lies. Voters minds have been brainwashed into thinking the great bestest tax cut of all was a sham. https://www.bloomberg.com/news/articles/2018-09-20/internal-gop-poll-we-ve-lost-the-messaging-battle-on-tax-cuts

    All of the trump+republican policies were well thought out genius policies. They are not “random” or lucky decisions as Klarman claims

    https://www.nytimes.com/2018/09/15/opinion/sunday/seth-klarman-donations-trump-democrats.html

    MAGA!

    Saturday, September 22, 2018 at 2:46 am | Permalink
  2. Greg wrote:

    Exxon-Mobil got a $6 billion tax cut from the 2017 Republican tax law and nearly quintupled their 4Q17 profit. Other major oil producers have profited likewise. How’s that been working out at the pump for us lately? https://www.usatoday.com/story/money/2018/02/02/exxon-mobil-profit-trump-tax-cut/300076002/

    But it’s a small price to pay for a now booming stock market, right? Even though the “boom” is largely the result of the massive stock buy-backs large corporations have used their tax breaks on and thus toward top executive pay through the resulting inflated stock options and dividends, not so much to invest in their businesses and employees, whose pay checks continue to stagnate. Meanwhile, soybean farmers and businesses reliant on steel imports are reeling from Trump’s tariffs on Canada and China, not to mention the higher prices passed on to consumers. Oops, there goes another chunk of your meager middle-class tax break.

    And don’t look now, but if Republicans hold the House and Senate in the Fall elections, they’ll be coming for our SS and Medicare “entitlements” to make up for those budget busting tax cuts. Because, you know, they’re deficit hawks again now. Yea, genius.

    Someone wake me when we’re Great Again.

    Sunday, September 23, 2018 at 8:39 am | Permalink

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  1. When Is a Tax Not a Tax? – FairAndUNbalanced.com on Monday, September 24, 2018 at 5:56 am

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