Donald Trump wants to cut taxes and pay for them with tariffs

One of the enduring divisions between Democrats and Republicans in the United States centers on how to use the tax code to achieve ideological goals. So it’s no surprise that the parties’ major nominees — Democratic Vice President Kamala Harris and former Republican President Donald Trump — are offering starkly different views on how they would use tax policy. In his third campaign for president, Trump is promising further tax cuts, but also coupling them with aggressive tariffs on imported goods, which act as a kind of tax on the importing company that is ultimately passed on to consumers.

More tax cuts are coming

One of Trump’s most important achievements as president was the Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA, among other things, permanently reduced the corporate tax rate from 35% for most companies to 21%. While the changes extended the U.S. economic expansion, which ended abruptly with the COVID-19 pandemic in spring 2020, they also worsened U.S. structural economic growth. budget deficit. Nevertheless, the Trump campaign has discussed another business round tax reductionto a 15% rate for domestic manufacturers, although neither this proposal nor any proposed policy regarding individual or corporate tax rates can be found on the campaign’s official Agenda 47 policy pages.