Breaking down Trump's 'tariffs-for-tax cuts' plan

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

Connect with CNBC News Online

#CNBC
#CNBCTV

[wilhelmina-oc]

The biggest lesson I learned in 2023 about the stock market is that nobody knows what will happen next, so practice some humility and low a strategy with a long-term edge.

[teebone]

1% tax cut WTF why in the hell would this be a good thing for working people while prices rise everwyere

[Ullumma]

20% tariffs across the board will trigger inflation and raise costs like a National VAT!

[faceme]

Sounds like tax poor and save the rich

[Trohn]

How about cut taxes on the middle class. Rich people don’t need anymore tax cuts

[Nate_K]

Tariffs on the stuff regular people buy and tax cuts for the rich

[FlanzShirt]

How does Robert frank feel about the lack of phone booths nowadays? Is he finding it more difficult to change into a blue and red spandex suit surreptitiously?

[chri]

Great tax poor people with inflation so billionaires can save a couple bpts

[DrewFlowers-lb]

Trump tarrifs are pure nationalism. If you liked what Hitler did for Germany, your gonna love what Trump will do for America.

[ChickenEater-zcjq]

If the United States eliminated federal income taxes and relied primarily on tariffs, it would fundamentally alter the economy, government funding, and global trade relations. Here’s a breakdown of likely outcomes:

1. Revenue Challenges: Federal income tax accounts for a large share of the U.S. government’s revenue (about 50%). Replacing this solely with tariffs would require extremely high import taxes to make up the difference, potentially limiting funds for federal programs, social services, defense, and infrastructure.
2. Higher Consumer Prices: Heavy reliance on tariffs would increase the cost of imported goods. Businesses that rely on imported materials or products would pass these costs to consumers, causing widespread price inflation, especially on electronics, clothing, and cars, where imports are significant.
3. Domestic Industry Protection: Higher tariffs could help protect U.S.-based industries by making imported goods less competitive, potentially boosting domestic manufacturing and jobs in certain sectors. However, this effect may be limited as supply chains are globally interdependent, making it hard to completely “reshore” production.
4. Global Trade Retaliation: Other countries would likely respond with tariffs of their own on U.S. exports, creating a trade war scenario. This could hurt U.S. companies reliant on exports, impacting agriculture, automotive, and technology sectors.
5. Income Inequality: Without federal income taxes, wealthier Americans would pay less tax proportionate to their income, while lower- and middle-income households would bear a higher tax burden due to increased prices from tariffs. This could exacerbate income inequality.
6. Economic Instability: Shifting away from a diversified tax system to reliance on tariffs alone would make government revenue highly volatile, dependent on trade volumes and international economic conditions. Any reduction in imports due to economic downturns, trade agreements, or foreign policy issues could drastically reduce revenue, creating financial instability.

In short, a shift to tariffs as the primary revenue source could lead to higher consumer prices, economic inequality, trade conflicts, and a less stable federal revenue system.

[quartytypo]

Trump came up with this tax plan from reading Mein Kamph.

[thejeffinvade]

My agent, that
LOL, that felt personal, joe

[thomasw]

I want to see a democrat vs Republican vs independent/centrist analysis side by side so we can all compare. Democrat analysts are definitely gonna find flaws in trump’s planning.

[navi]

Other countries will retaliate and add or increase tariffs on American exports

[chri]

Look up how the great depression started and then talk to me about tarrifs

[trevorstepoo]

Get tax cuts for the rich this might help with the trickle-down effect

[jonh]

3% for the richest and 1% for the middle class. Are people stupid?

[KnialPiper]

These talking heads….🤦 Vote Harris! Just look at the results. Biden vs Trump. The choice is clear.

[ThomasWright-nk]

lol, this analyst actually tried to make it sound like Trump’s tariff plan would do anything but chaos in the economy.

[Boxofcrap]

So the average family has to pay $700 more in the end under Trump? Why would you vote for that?