I think we all understand how tariffs are intended to work. The problem is that we also know from experience that this is not how they work in practice, and historically are associated with negative economic outcomes overall. The findings described in the article appear consistent with past negative experience.One correction regarding the tax impact: since tariffs are a flat tax and not progressive, to the extent that they displace progressive income tax, the net tax burden on the average taxpayer would increase, not remain the same.
AnthonyMouse|1 month ago
In general taxes are associated with negative economic outcomes overall, and tariffs are taxes. But displacing other taxes with them doesn't inherently bring a net cost.
> One correction regarding the tax impact: since tariffs are a flat tax and not progressive, to the extent that they displace progressive income tax, the net tax burden on the average taxpayer would increase, not remain the same.
The net tax burden on the average taxpayer would always be the same for any change which is revenue-neutral. Whether the median taxpayer would pay more or less depends on who is buying the things being imported and what the alternate tax system looks like. For example, if the middle class is paying ~20% in practice and the rich pay >30% on paper but <20% in practice, that isn't actually a progressive tax system as implemented. Likewise, if the tariffs are on e.g. phones, but the top quintile buy a $1000 phone every two years and the bottom quintile buy a $100 phone every five years, the tariffs are being imposed on something the rich buy 25 times as much of. Meanwhile things like food and shelter are largely produced domestically.