• tal@lemmy.today
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    2 days ago

    Consumption taxes are generally considered to be regressive, disadvantageous to the poor, because they spend a larger portion of their income on consumption and thus the tax. This would contrast with income taxes (which, with progressive tax brackets, hit the middle class harder) or wealth taxes, which tend to hit the wealthy harder.

    I suppose that one could argue that a tariff is more-or-less comparable to a consumption tax in that it taxes someone proportionally to consumption, if a lot of that consumption is imported goods.

    kagis

    These guys at Yale talking about Trump’s tariffs say so:

    https://budgetlab.yale.edu/research/fiscal-economic-and-distributional-effects-20-tariffs-china-and-25-tariffs-canada-and-mexico

    Tariffs are a regressive tax, especially in the short-run. This means that tariffs burden households at the bottom of the income ladder more than those at the top as a share of income. In this case, the percent change in disposable income resulting from the tariffs is almost 3x as much for households in the second decile by income as it is for households in the top decile-- -2.5% versus -0.9% in the case of tariffs with full retaliation (see top panel of chart below).