Any thoughts on this "educated guess" about the ultimate impact Trump's Tax policy?

[civilwarbuff]

No. Not guess. Maybe I'm sensitive to how people use the word "guess". But the ITEP didn't just "guess". They used data, modelling and historical impact to create an hypothesis.

In other words they guessed.....because they don't know......part of predicting the future.

Not if tariffs are roundly a negative impact on consumers.

The right has been complaining about unaffordability for the last 4 years.

It's a BAAAAAD look for you guys to suggest that tariffs raising prices isn't a big deal.

You don't understand negotiating tactics then, do you?......of you just simply want to blindly and roboticly criticize (the more likely reason).

 

[ozso]

ok.

You can still think it will BENEFIT and help America and it's people. Or you can think it'll be disastrous and people will become poorer.

Or you could have an opinion in the middle.

Nope, there's nothing you can do about it. But, if your prognostications are right, you get to tell people you were right.

As someone in the Second 20%, I benefitted taxwise during the last Trump administration. I enjoyed what for me was a significant reduction. Despite the left claiming how badly us poor folks were being shafted.

So based on past experience, the left is going to proclaim their doom and disaster prognostications were right no matter what.

I'll hear "while it seems to you like it's going good, according to this chart it's not".

 

[Bradskii]

In other words they guessed...

So what's your guess? That the cost of living will go down if tariffs are introduced?

 

[Always in His Presence]

A Distributional Analysis of Donald Trump’s Tax Plan

I'm not much of an accountant type person but I would assume the people at the Institute for TAxation and Economic Policy would be.

Here is what they figure:
View attachment 358412

View attachment 358413


View attachment 358414

Please support you OP and link Trumps official tax policies from his campaign or other direct sources.

Not what someone says they are, but the actual policies.

Thanks

 

[rambot]

Please support you OP and link Trumps official tax policies from his campaign or other direct sources.

Not what someone says they are, but the actual policies.

Thanks

NAh.

I have put up a source.

If you feel their misrepresentation of his policies is eggregious, I would mightily encourage you to research and point out how that is the case.

Also, this thread is more about the impact of those policies. I would be surprised if ITEP hid their methodology so go look for it.



Is this becoming a "we can ONLY trust Trump and who he says we can" trust mentality? Because it is DEFINITELY looking like it.

 

[essentialsaltes]

Please support you OP and link Trumps official tax policies from his campaign or other direct sources.

During the campaign, Trump talked about a 60% tariff on China and a "10% to 20%" tariff on everything and everywhere else. That was the basis (using the 20% figure) of the estimates above (or at least the major negative factor).

Recently (late November) Trump has suggested an additional bonus 10% tariff (to 70% total) on all products from China and 25% on everything from Canada and Mexico (the source of about a quarter of all US imports). So in both cases, more severe than the original plan.

Although it does not use the "10% to 20%" value Trump suggested on the campaign trail, the 2024 Republican platform does call for "baseline tariffs", i.e. tariffs on all imports coming from anywhere.

 

[Always in His Presence]

Is this becoming a "we can ONLY trust Trump and who he says we can" trust mentality? Because it is DEFINITELY looking like it.

I only asked for the topic of the thread - which is Trump’s Tax Policies -

Lots of talk about what might happen - no links showing his actual policies.

 

[Always in His Presence]

During the campaign, Trump talked about a 60% tariff on China and a "10% to 20%" tariff on everything and everywhere else. That was the basis (using the 20% figure) of the estimates above (or at least the major negative factor).

Recently (late November) Trump has suggested an additional bonus 10% tariff (to 70% total) on all products from China and 25% on everything from Canada and Mexico (the source of about a quarter of all US imports). So in both cases, more severe than the original plan.

View attachment 358456

View attachment 358457

Although it does not use the "10% to 20%" value Trump suggested on the campaign trail, the 2024 Republican platform does call for "baseline tariffs", i.e. tariffs on all imports coming from anywhere.

View attachment 358458

But those are not actual tax policies.

Maybe the title of the thread needs to be altered.

 

[Arcangl86]

But those are not actual tax policies.

Maybe the title of the thread needs to be altered.

Tariffs are taxes, ergo tariff policy is part of his tax policies.

 

[essentialsaltes]

Woe! Woe! If only rambot had inserted "and economic" into the thread title, we could discuss the merits and consequences of Trump's tariff plans like adults. But alas, we can only gnash our teeth in vain.

 

[Say it aint so]

I only asked for the topic of the thread - which is Trump’s Tax Policies -

Lots of talk about what might happen - no links showing his actual policies.

The plan is to extend the middle class tax cuts, which were to sunset next year; while the upper income and corporate taxes had always extended into perpetuity. I think Harris wanted to reverse that. Since we already experienced the tax cut, we have a test case example as to what exactly what will happen.

 

[Pommer]

I only asked for the topic of the thread - which is Trump’s Tax Policies -

Lots of talk about what might happen - no links showing his actual policies.

Do his actual policies “exist”?

 

[rambot]

In other words they guessed.....because they don't know......part of predicting the future.

Incorrect. They did not "guess" and they certainly didn't "just guess". That kind of label suggests it's capricious and not based on anything concrete.

That is not the case here.

You don't understand negotiating tactics then, do you?

Yes....that's it. Of course. Trump is playing 10-d chess. It's not that it's a fundamentally bad idea that could bankrupt Americans but will certainly have a negative affect.

I know enough about negotiation tactics that if you make a threat and don't follow through, you're going to be seen as weak and stupid.

......of you just simply want to blindly and roboticly criticize (the more likely reason).

I'm truly confused why you think Trump may be above criticism on this matter.

 

[Say it aint so]

In other words they guessed.....because they don't know......part of predicting the future.

You don't understand negotiating tactics then, do you?......of you just simply want to blindly and roboticly criticize (the more likely reason).

I am quite sure those other nations, who in example caused us to have to bail out our farmers; given Trump's "I got this one hammer because every problem looks like an nail" have been strategizing ahead.

 

[ThatRobGuy]

It seems as if they're using some "creative ways" to come to that conclusion.

So to be clear, the only the bottom 4 lines are the only ones they can definitively quantify via codified policy at the moment.

They're basing this entire prediction on a "guess" about how the proposed tariffs will ultimately impact things, which is still a wildcard at the moment.


I think we all recall Nobel winner Paul Krugman (yes, Paul "the internet's impact on the economy will be no greater than the impact of fax machines" Krugman) predicting that there would be an economic recession of disastrous proportions once Trump took office after the 2016 election, and that it would be marked by the stock markets crashing to a point they may never recover from, and unprecedented unemployment levels.

The truth is, economics isn't an exact science, there are constantly new variables getting introduced, and a lot of their predictions end up being wrong. If Nobel winners in that field are getting things that wrong on a semi-regular basis, I don't know we should be putting a ton of stock in their predictions about certain things.

 

[RocksInMyHead]

They're basing this entire prediction on a "guess" about how the proposed tariffs will ultimately impact things, which is still a wildcard at the moment.

While it's not certain what the exact impact of Trump's proposed tariffs would be, they can make a pretty educated guess based on the impacts of tariffs from his first term, as well as the fact that he's proposing "blanket" tariffs (i.e. on everything, not just specific products), which makes it easy to apply to existing trade data. ITEP provides their methodology at the end of the article:

Our approach to calculating the incidence of tariffs is strongly informed by Clausing and Lovely (2024a).

In particular, we adopt their reasoning as to why the incidence falls on consumers (a view shared almost universally among economists) and whether to account for changes in behavior. We also adopt their assumptions about the policy: a 20 percent tariff on goods from all countries except China for which the tariff would be 60 percent and the assumption that the 60 percent would be a leveling up on past tariffs not on top of tariffs previously imposed (Clausing and Lovely, 2024b).

Although, as described below, our methodology differs from that of other analysts, such as Clausing and Lovely (2024) and Mulholland and Duke (2024), we reach similar conclusions. Our levels appear to be slightly lower than Duke and a bit less regressive than Clausing and Lovely. Our levels are higher than Clausing and Lovely because they do not distribute the entire amount attributable to the U.S. household sector.

A distinction between the approach used here and other analyses is that we make use of the consumption tax module of the ITEP Microsimulation Tax Model. The contours of that module are discussed in the methodological appendix of Davis et al. (2024). We also use a more complicated path from import data to household incidence. Our starting point is the Bureau of Economic Analysis (BEA) Import Matrices in conjunction with the BEA Use Tables. From these tables we find direct imports purchased as well as allocating imported inputs through to these categories of final purchasers. The final purchasers are in 17 categories in the data reflecting purchases for personal consumption, non-residential private fixed investment (businesses), residential private fixed investment, the federal government and state and local governments.

To distinguish between imports from China and the rest of the world, commodity level trade data are used and aligned with the BEA Use Table commodities.

For the portion of the imports that go to personal consumption, the BEA PCE Bridge is used to facilitate linking to the consumption items in the ITEP consumption tax module. Tariffs are calculated and distributed by the model. This constitutes most of what is distributed.

For the other final purchasers, we adopt different approaches. We assume that no tariffs are paid on imports by the federal government—or if they are, they are payments to itself so they do not impact households. State and local governments are treated as passing the taxes on to taxpayers. Business purchases and imported inputs into exports are modeled consistently with the handling of business consumption taxes in the ITEP Model as described in the methodological appendix of Davis et al. (2024).

For the revenue estimate we use the elasticities employed by Clausing and Lovely (2024a) as well as their revenue offset.

 

[essentialsaltes]

I am quite sure those other nations, who in example caused us to have to bail out our farmers; given Trump's "I got this one hammer because every problem looks like an nail" have been strategizing ahead.

Last time, China turned to Brazil for soybeans (and more recently corn) and though that fight has eased some, that business hasn't completely come back to the US. That's just lost business for US farmers. Next up, beef.

US agriculture in crosshairs as Brazil and China cozy up​

But now Brazil is looking to beef up – literally – its agricultural trade ties with China and capitalize on potential tariff escalations between the United States and China once President-elect Donald Trumpbegins his second term in January.

Hailed as a historic move, China back in March cleared an additional 38 Brazilian meat exporters, bringing the total to 144. Shipments have not significantly increased since then, but... [they're certainly ready to do so at a moment's notice]

 

[Richard T]

Here are a few links that will inspire some thought on projections about Trump tax cuts.

Trump’s Tax and Tariff Ideas: Details & Analysis

We estimate Trump’s proposed tariffs and partial retaliation from all trading partners would together offset more than two-thirds of the long-run economic benefit of his proposed tax cuts.

taxfoundation.org

What Trump's Tax Plans Mean for You | Bankrate

Trump wants to cut taxes on Social Security benefits, tips and overtime pay, plus make existing tax law permanent, and increase tariffs.

www.bankrate.com

As to the social security taxation, the higher the income the more the benefit. The poor do not pay taxes on social security because they do not collect enough and have little or no other income. So to cut taxes on social security are no help to them at all. Cutting taxes on tips too is favoritism. Why should a certain group get something no one else does? I mean if I make 40K as a worker, I pay taxes, a waiter making 40k, gets maybe 30K in tips and pays taxes on 10k maybe? How is that fair? Likely people will just quite tipping as much. They better word the law right though or every service worker may demand "tips."

The Laffer curve suggest that at certain levels raising taxes will decrease income. This means lowering taxes at certain levels will increase tax revenues. The problem is that no one knows for sure what levels lead to more or less revenue. We should all laugh because if your back is against the wall and you have a 5% tax hike, will that make you work less? Absolutely not, you probably need a a second job to make up the difference. Meanwhile a rich guy backs off because the extra tax is not worth the pain of the hours. Thus, while the curve measures averages the reality is that it still affects people in all different ways. (To me the curve is the basis for tax cuts since Reagan so very important to understand). Here is a good lesson if you do not know it. Laffer Curve: History and Critique

So the Trump tax cuts to be made permanent are likely going to hurt revenue. So it seems Trump will shift taxes permanently from graduated income taxes to tariff taxes. This should too hurt the poor more than the rich. As others in here have stated though tariffs can be good for other reasons. Anyone else see Trudeau and the Mexican President already respond and starting negotiations? Who knows how it will end up. I doubt Congress will do much for Trump there.

There are good reasons why tax projections are just an opinion. Even the best models fail, but often the government is pushing for something and the true assumptions are stated wrongly on purpose. So in general I use a guideline that seems to be more reality based. When government says a program costs 50 billion, the true figure will be 2 to 3X that amount. When the government says it will save 50 million, that figure too will likely be far less. Here is one such older scholarly quote. "Because forecasting errors typically affect the budget balance much more than policy changes, Congress should not put numerical targets into legislation affecting the budget process." Source: The Uncertainty of Budget Estimates. - Document - Gale Academic OneFile

If you look at 1929, the income distribution was the worst in US history. It now has surpassed that. Add in some major disasters or a likely war and the budget is shot completely. To me that is the likeliest scenario. That tariffs too are on the table like Smoot-Hawley had them in 1930 seems laughable as well. Economics is the dismal science, I wonder if Trump can really deliver?

 

[rambot]

It seems as if they're using some "creative ways" to come to that conclusion.

View attachment 358465

So to be clear, the only the bottom 4 lines are the only ones they can definitively quantify via codified policy at the moment.

They're basing this entire prediction on a "guess" about how the proposed tariffs will ultimately impact things, which is still a wildcard at the moment.

I believe they were using Trump's last set of tariffs as a basis for their calculations. Given that trump's new tariff hammer is MUCH bigger, the "guess" is meant to be a conservative one in terms of the impact of tarrifs.

I think we all recall Nobel winner Paul Krugman (yes, Paul "the internet's impact on the economy will be no greater than the impact of fax machines" Krugman) predicting that there would be an economic recession of disastrous proportions once Trump took office after the 2016 election, and that it would be marked by the stock markets crashing to a point they may never recover from, and unprecedented unemployment levels.

Care to provide a bit more context for this prediction? What was it based on? How he came to support that with data?

Also, after his internet's comment, not sure why anyone would listen to him.

The truth is, economics isn't an exact science, there are constantly new variables getting introduced, and a lot of their predictions end up being wrong. If Nobel winners in that field are getting things that wrong on a semi-regular basis, I don't know we should be putting a ton of stock in their predictions about certain things.

Fair enough.

But I'm still struggling to find an economist who has EVER Said that tariffs are net benefit

 

[civilwarbuff]

So what's your guess? That the cost of living will go down if tariffs are introduced?

Why would I guess?