Trump's escalating trade war with China completely wipes out the minuscule benefit most families would see from the GOP tax bill.
Despite Trump's relentless bragging about the economy, most families can expect to see a tax hike in 2020 thanks to Republican policies put in place over the past several years.
Near the end of August, economists at J.P. Morgan released an analysis showing Trump's escalating trade war with China is going to cost the average family $1,000 per year. Americans will be forced by Trump to pay more for products made in China, including shoes, clothes, toys, and other items.
Even Senate Majority Leader Mitch McConnell admitted Trump's policies "amount to a tax increase, frankly, on working-class people. I mean [it] drives up the cost of goods that you would be purchasing at Walmart and other places."
As families get financially hammered by Trump's trade war, the Republican tax bill passed at the end of 2017 doesn't help much.
Data released at the end of August by the Institute on Taxation and Economic Policy shows that a majority of families will see less than a $1,000 benefit from the GOP tax law. A full 60% of households will see a benefit of $780 or less.
In fact, the poorest households — those making less than $25,000 — will see an average benefit of only $60 for the year. If those households are forced to pay $1,000 more for goods thanks to Trump's trade war, that amounts to a $940 tax hike.
For households making between $25,000 and $43,000, the combined impact of the tax law and trade war equals a $610 tax increase. Even families making $70,000 — more than the median household income in the U.S. — will face $220 in additional taxes.
For comparison, the richest 1% of households will see a benefit of almost $50,000 from the GOP tax law in 2020, far more than necessary to outweigh the economic damage from Trump's trade war.
When boasting about the GOP tax law, Trump said it would be "rocket fuel" for the economy. However, evidence shows it has largely been a dud, with economic growth slowing to a mere 2.5% in 2018. During his 2016 campaign, Trump promised up to 6% growth.
Trump's failing trade war is also taking a toll on the overall economy. The American manufacturing sector is technically in a recession, and economic experts are warning of a looming recession for the entire country. The trade war is especially tough for farming families, as farmers across the country are filing for bankruptcy at record rates.
Tax hikes are just the latest way Trump and Republican policies are hurting American families.
Published with permission of The American Independent.