01 February 2017

GOP Import Tax Would Hurt Its Base

The GOP plan to reform corporate taxes — which the Trump administration last week claimed could make Mexico pay for President Trump's border wall — would effectively charge companies 20 percent on their imports. To consumers, it would feel a lot like a hefty new sales tax on foreign-made products. And, like any sales tax, it would put the most strain on the poorest households. 
Families at the bottom of the income ladder could pay 5 to 8 percent of their incomes as a result of increased prices from the Republican proposal, according to new calculations from Katheryn Russ, an associate professor of economics at the University of California, Davis. Middle-class families would pay between $700 to $1,000 a year, or about 1.3 to 2 percent of their incomes. . . . The highest-earning 10 percent of households would pay the most, because they buy the most. But since poorer families spend a larger share of their paychecks toward purchasing food, clothing and other necessities — which are often imported — the import tax would make a larger impact on their budgets.
From The Washington Post.

Which famous company would be particularly prominent among those hurt by the plan? 

Walmart, the quintessential retailer of Trump's America, which keeps prices low, in substantial part, by importing goods from lower wage countries like China. Many of its products would see an immediate 20% price hike.

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