TARIFFS: A tax on the consumer
Companies that use imported goods and materials tend to pass the costs of tariffs to their consumers. This helps them maintain profits, increasing the value of their shareholders’ investments. These higher prices are primarily paid by non-shareholders who do not participate in corporate earnings. The impact of tariffs was illustrated by a recent directive from President Trump to Walmart to “eat” the tariffs, and not pass the cost to consumers. Tariffs are a form of tax, borne mainly by the consumer.
We also see Congress proposing legislation to extend tax cuts that mainly benefit the wealthy. To help offset these tax cuts, spending reductions will be made to programs that benefit lower-income citizens. These program cuts will not completely offset the loss of tax revenue, leading to an increase in the national debt.
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