Tariffs are a Very Unpopular Regressive Tax

Tariffs are extremely unpopular with the public and are highly regressive taxes. We estimate that tariffs will raise over $400 billion in revenue in 2026 which is over 1.3% of GDP.  Consumers are rightly concerned about the cost of living after the effects of both the Federal Reserve debasing the currency by over 20% during the Pandemic and by the burden of higher tariffs.  There two dynamics have  hammered lower income consumers who do not own their own home as rents soared by over 21% since the beginning of the Pandemic.

We recommend that the Standard Deduction be raised from $15,750 to $20,000 for Federal taxpayers, which can be funded with tariff proceeds.  A $20,000 standard deduction would virtually eliminate taxes on lower income taxpayers making up to $100,000 per year.   This tax cut will ease the burden on lower income consumers suffering from lower purchasing power from irresponsible monetary policy and regressive tariffs. 

This approach is superior to gimmicky bonus checks as it provides long term relief to lower income taxpayers, provides incentives to work and simplifies tax filings.  Single taxpayers making less than $100k are approximately 85% of total taxpayers.