Donald Trump’s Plan to Tax Working Families in Exchange for Giveaways to Corporations is a Disaster

Donald Trump’s signature 2017 tax cuts failed to produce the promised benefits, so he plans to implement more of the same. In fact, he promised multiple times to pair his 2017 cuts with tax relief for middle-class families, but those promises ended after the 2018 midterms, and middle-class tax cuts never materialized. The reality is that Trump’s tax boondoggle saved the rich billions and raised taxes on many middle-class families.

Donald Trump’s strategy for the 2024 election is similar: promise whatever he thinks his audience wants to hear and hope they don’t notice he’s lying until it’s too late. Donald Trump likes to play-act understanding working Americans when he actually holds them in contempt.

“Adjusted for inflation, total federal revenue actually dropped between 2017 and 2018 and only saw a significant increase after Trump left office in 2021, according to the U.S. Treasury Department.” – Pennsylvania Independent

Tariffs Cause Inflation

However, one tool Donald Trump loves is tariffs, which he used unsuccessfully during his first administration. When he imposed tariffs on Chinese imports, China responded with retaliatory tariffs of up to 25 percent. These tariffs were primarily targeted at U.S. agricultural exports. This resulted in a $27 billion reduction in U.S. agricultural exports in the year and a half from mid-2018 to the end of 2019.

Donald Trump is now promising to implement across-the-board tariffs on U.S. imports. He has thrown out numbers that range from 60 percent to over 200 percent, depending on how he feels that day. He has called tariffs beautiful and referred to himself as the “Tariff Man.”

Those tariffs are paid by importers — American companies — not the foreign country. In return, U.S. companies pass the costs onto consumers. According to five separate analyses, Donald Trump’s tariffs would cost every American household an average of $4000.

In addition to raising costs for all Americans, which Kamala Harris calls the Trump Sales Tax, across-the-board tariffs are inflationary and anti-growth. Studies of the plan have estimated that it could cause inflation to rise between three and six percentage points. That would put inflation at between six percent and 9.3 percent — almost as high as it was during the worst of the post-pandemic inflation.

When businesses have less money, they are forced to cut wages and jobs, hold off on hiring, and put off expansions.

Even by inflicting that level of pain, Trump’s plan still blows a bigger hole in the deficit that his 2017 tax giveaways already have. We can’t afford that risk.