While President Trump has championed cutting taxes for corporations, his newly enacted tariffs are equal to a tax increase that dwarfs most in recent decades, CNBC reports.
According to CNBC’s examination of Treasury Department data, the $72 billion raised from all of Trump’s tariffs marks one of the biggest tax raises in the past 26 years.
“In fact, the tariff revenue ranks as the largest increase as a percent of GDP since 1993 when compared with the first year of all the revenue measures enacted since then, according to the data,” CNBC observes. “Only the revenue raised in the fourth year of the Affordable Care Act is greater, but not by much.”
Nonpartisan organization Tax Foundation estimated that the sum of Trump’s tariffs, including the recent tariff hike from 10 percent to 25 percent on Chinese goods worth $200 billion, will bring in $72 billion, or roughly 0.34 percent of the U.S.’s GDP. Meanwhile, the 1993 budget and reconciliation act brought in revenue equalling 0.36 percent of GDP at the time.
“It’s certainly not the largest tax increase in history but it does rank among some of the bigger tax proposals over the last 20 years that have raised revenues,″ said Tax Foundation chief economist Kyle Pomerleau.
And while there are huge differences between taxes and tariffs, most economists see that U.S. businesses and consumers will bear a majority of the costs of Trump’s tariffs against China, despite Trump’s claims that Chinese companies will be the ones funding the tariffs.
The Penn Wharton Budget Model’s Kent Smetters estimated that the tariff will cost U.S. households earning the median income of $61,000 roughly $500 per year.