Trump’s Giant Tax Increase
April is set to see a huge surge in consumer spending—and Donald J. Trump can take full credit for that. The reason? People are rushing to buy everything from cars to electronics to clothing before tariff-related price hikes take effect.
Tariffs are taxes. They are taxes that hit all Americans. The tax is paid by importers—not exporters—and importers must even post a surety bond guaranteeing
payment.
Trump also uses tariffs to help his friends. Tim Cook, Apple’s CEO, made a hefty donation to Trump’s inauguration and pledged to invest half a trillion dollars in the U.S. (a promise few believe he’ll keep). The result? Trump waived iPhone tariffs. Other waivers will likely follow, benefiting the oligarchy. As for small businesses getting crushed by tariffs? Well, you’re on your own. It takes serious money to buy off a president, and most of us don’t have it.
Inflation looms on the horizon, though it may be somewhat tempered by falling oil prices—a drop caused by the global economic slowdown triggered by Trump’s tariffs. The International Monetary Fund has already slashed its world growth forecast by 0.8% due to the tariffs. Adding to inflationary pressure is the declining value of the dollar, making imports even more expensive for Americans on top of tariff hikes. Could we be entering a new era of stagflation? (That’s no growth plus inflation—something the U.S. hasn’t seen since the oil shocks of the late 1970s.) It’s a real possibility.
Trump inherited a nearly two-trillion-dollar deficit. Even if tariffs raised a trillion dollars and spending cuts saved $250 billion, the U.S. would still have a larger deficit than in Obama’s last year—though at least there’d be progress. But that’s not happening. With the IRS gutted, tax fraud will skyrocket, slashing revenue. Meanwhile, Trump has proposed trillions in new tax cuts. A year from now, the U.S. could face a slowing, or even recessionary economy, with high interest rates battling inflation and soaring borrowing costs from a ballooning deficit.
While this is certainly a worst-case scenario, it’s no fantasy. It may take a generation to undo the economic damage Trump has inflicted in just 100 days.
feels very “Not Great Again”