Let’s Talk… Tariffs in Exchange for Lower Income Taxes!

Because the incoming Trump administration likes tariffs so much, I think it’s important to discuss proposals that will be on the table in the next couple of years. Both parties have used tariffs in the past. President Trump put tariffs on goods coming from China. President Biden in some cases increased the tariffs enacted by the Trump administration. 

One such proposal is to reduce or eliminate the income tax by enacting a 20% tariff on all goods coming into the United States and a special 40% tax on goods coming from China. In short, according to the Congressional Budget Office, this tariff proposal would raise almost 1 trillion dollars which would not be enough to eliminate the income tax because that brings in 2.5 trillion dollars. This is something that needs to be looked at as a possible revenue source to stop or reduce countries that dump cheap goods in the USA thereby harming our labor force.

Lastly, I recognize both the benefits and the risks of tariffs, and I’ll be talking about them quite extensively in the future. Next week we will examine the risks. 

The content in this material was created for educational and informational purposes only and is not intended as an investment advice.

The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendations for any individual.