Trump has made some policy statements during his campaign that could affect the cost of living for some Americans. In particular, Trump’s promised tariffs on imports and his tax policies could increase the cost of living, especially for middle-class Americans.
”Trump has proposed increasing tariffs and trade restrictions,” said Goss. “Contrary to the assumed outcomes by the political class, this action would result in trade retaliations from U.S. trading partners and much lower tax collections than expected. The result will be reductions in U.S. sales of agriculture and manufacturing abroad and a consequent fall in growth and federal tax collections.”
Trump’s proposal involves replacing the
income tax with a 10% general tariff on imports of various goods and services. He also wants to place a 60% tariff on Chinese imports.
An increase in tariffs will likely increase the cost of many goods and services. Businesses will be forced to pass on the increased costs to their customers, which would likely increase the cost of living for Americans.
“This will raise the price of foreign goods sold in the U.S., result in retaliation from U.S. trading partners, slow U.S. economic growth by reducing U.S. agriculture and manufacturing activity, and heighten U.S. inflationary pressures with a hawkish Federal Reserve raising interest rates.”
According to the Center for American Progress Action, the proposed tariff increases would amount to around $1,500 in increased annual taxes for the typical household, including a $90 tax increase on food, a $90 tax increase on prescription drugs, a $70 tax increase on clothing, an $80 tax increase on electronics, a $220 tax increase on cars, auto parts and other vehicles, and a $120 tax increase on oil and petroleum products.
“If elected, former President Trump would continue his 2017 tax reform bill" It’s important to note that extremely wealthy households — those making $500,000 or more per year — would receive a larger tax cut than everyone else. This difference would be in dollars and as a percentage of their after-tax income. Without that additional tax money from the extremely wealthy, the nation’s debt will continue to rise.
While it’s difficult to predict the cost of living with a second Trump term, the best predictions we can make are based on his first term in office and his campaign promises. However, Trump’s proposed tariffs on imported goods and tax policies are especially concerning to many experts. (but shhhhh, dont trust the experts. trust trump. he knows more about everything than anyone.)