Tariffs are regressive taxes.<\/p>\n
Regressive taxes are those where\u00a0the <\/span>tax rate decreases as the taxpayer\u2019s income increases. In other words, people with <\/span>lower incomes pay a higher percentage of their income in taxes compared to those with higher incomes.<\/span><\/p>\n Consumption taxes are almost invariably regressive taxes. Those on lower incomes consume higher proportions of their income. That's because they save less of their income than do the wealthy. It's hardly rocket science to point this out. Tariffs are consumption taxes. They are regressive. They will make most Americans significantly worse off. They will also fuel inflation.<\/p>\n In that case, what Trump is calling Liberation Day in the USA today is actually all about a massive shift in taxation from those with high incomes to those with lower ones.<\/p>\n This shift will be reinforced by the perpetuation of Trump's first-term tax cuts for wealthy America, which it is now planned should continue, and which might be expanded.<\/p>\n For the record, let's also be clear that US consumers will settle the liability for tariffs. No one else can ultimately settle the bill, although other countries are worried about the knock-on effects as a result of reduced demand for the goods that they have supplied to the USA.<\/p>\n The result is that, like almost everything Trump does, the description applied to today is almost wholly misleading. This event is not about liberation. It is about crushing the well-being of the US consumer, whilst freeing those with significant wealth in the USA from tax bills that they should rightly owe.<\/p>\n If Trump calls that liberation, I do not.<\/p>\n","protected":false},"excerpt":{"rendered":"