Home
/
RELIGION & LIBERTY ONLINE
/
How Trump and Sanders Plan to Raise Taxes on the Poor and Working Class
How Trump and Sanders Plan to Raise Taxes on the Poor and Working Class
Jan 5, 2026 5:01 AM

Imagine that a presidential candidate promised to raise taxes on everyone. Under the new proposal, both the wealthy and middle classes would pay more. But as a percentage of a person’s e, the tax increase would disproportionatelyaffect the poor and working class.

Now imagine that when many blue collar and working poor hear about this tax proposal they have a strange reaction: they cheer and consider it one of the primary reasons to support the candidate. They believe this deeply regressive tax that takes a large portion of their weekly paycheck is just what the American economy needs.

While this scenario may seem too absurd even for the bizarre 2016 election, it is actually happening. In fact, such a proposal has been made by both Bernie Sander and Donald Trump.

Both Sanders and Trump propose increasing tariffs on goods imported from other countries —and increase them significantly.* This isn’t that surprising for Sanders, a socialist who, on the issue of economics, is one of the most ill-informed candidates in modern history. But Trump should (and probably does) understand the detrimental impact tariffs have on the poor. And yet he has proposed an economy-crippling, poverty-increasingtariff.

In 2012, Trump proposed a tariff on China of 25 percent. In 2016 he bumped it up to 45 percent. (He later tried to lie and say he never proposed the 45 percent increase, but there is audio of him making the proposal.) A tariff is simply a tax on imports or exports, so Trump is proposing to raise taxes on imported goods by 25 to 45 percent. (To keep this point in mind, I’ll hereafter refer to tariffs as “taxes.”)

You might be thinking, “ So what? That’s a tax the Chinese have to pay.” But that’s not the way tariffs works. China doesn’t pay the tax — you do. If a tariff on Chinese goods is increased by 25 to 45 percent then you pay 25 to 45 percentmore for those goods.

Here’s a way to think about it. Imagine there are two hamburger stands in town. One is owned by the mayor’s wife, Veronica, and one is owned by a woman who lives in the next town over, Betty.

Of the two, Betty makes the tastier burger. She is also able to charge $1 a burger since she is able to buy her supplies in her own hometown for much cheaper. Veronica’s burgers aren’t quite as good and cost more to make. She has to charge $1.30 per burger.

The mayor decides to implement a new tax of 45 percent on producers (like Betty) who don’t live in the city limits. Since Betty’s profit margin is already low, she has to pass the bulk of the 45-cent tax on to her customers. Instead of $1 she now has to charge $1.35.

So who is better off in this scenario? The only winner is Veronica. Since her burgers are now cheaper, she is likely to sell more. And who is worse off? The customers who now have to pay 30 to 35 cents more for every burger. That is money they could have used to buy other products or services. Now they have to spend additional money on this new tax.

The same principle applies to taxes on goods and services imported from other countries. Customers simply have to pay more for goods and services they used to get much cheaper.

To understand how Trump’s tax increase would affect consumers, take a trip to Target or Wal-Mart and add 45 percent to almost all the prices. That’s money es directly out of your pocket into the hands of the federal government — all to punish you for buying goods that are cheaper to make in China.

Free trade advocates have pointed out for centuries that taxes on imports are evil and destructive. But over the past few decades even liberal economists e to recognize taxes on imports are a bad deal, especially for the poor. Edward Gresser of the Progressive Policy Institute explains why,

[I]magine a group of workers at a hotel. The hotel vice president, an unmarried recent MBA, makes a salary of $110,000 per year. Her secretary is a young, single mother, earning $25,000. And the maid cleaning their hallway, also a single mom, left the welfare system two years ago to begin a minimum wage job.

Each of these women pays four major federal taxes: e taxes, payroll taxes, excise taxes, and tariffs. The largest of these, the e and payroll taxes, raise $1 trillion and $700 billion respectively, and make up the bulk of taxation on the vice president. The tariff system, bringing in less than $20 billion a year, is the smallest tax, but places a hidden and surprisingly heavy charge on the secretary and the maid.

Gresser notes that the secretary loses three days’ pay to tariffs — twice as much asthe vice president —and the maid likely loses a full week’s pay. The reason: Tariffs are highest on the goods important to the poor.

Keep in mind that Gresser is referring to taxes that were already on imports in 2002. The poor would pay these taxes plus the increase proposed by Sanders and Trump. Since most of the poor and working class do not pay any federal tax, increasing the tax on imports is one of the biggest taxes they’ll ever have.

Why, then, do so many of e workers support this anti-poor policy that’s been presented by Sanders and Trump? There are several reasons.

First, many believe it is necessary to “bring jobs back to America.” The reasons why this isn’t even remotely plausible plicated, so I’ll dedicate a separate post to that issue.

Second, many people can’t seem to grasp that “taxes on producers” are taxes passed on to consumers. Companies sell products to make money. If the government adds a tax that artificially increases the cost of selling the product to a consumer, the tax will be paid by the consumer. Taxes on imports are similar to a pre-paid “sales tax.” Rather than collecting the tax at checkout, the tax is added into the price of the product. The tax may initially be paid by the foreign country, but you reimburse them when you purchase the product.

Third, most people don’t see the tax.Many people believe all price increases are caused by two phenomena: greed and inflation. If prices increases they assume it’s because pany wants to make more profit (hence, pany is being “greedy”) or that the price has been affected by inflation (a general rise is prices). They don’t even think about the taxes paid on imported goods. It never occurs to them that the reason they are paying more is because the government is forcing them to pay more for a product they could (and should) get much cheaper.

Fourth, politicians take advantage of the misperceptions and misunderstandings the American people have about economics. The vast majority of voters not only do not know much about economics, they do not want to be educated. They don’t want a politician (or journalists like me) explaining to them why a particular policy is destructive and makes them worse off. They merely want a politician to tell them what they want to hear and confirm what they already believe. If they think that China is the reason they can’t find a job, then they want a politician to tell them how they are going to punish China.

Fifth, the average consumer in the U.S. simply has no understanding of how taxes on imports affects them. This is especially true of the poor and working class, for the reasons cited above. Many of them therefore trust that a “successful businessman” like Trump must know what he’s talking about. After all, he wouldn’t support the policy if it hurt the poor, would he?

The answer, of course, is that politicians will champion any proposal that will help get them elected. Trump and Sanders are no different. Whether they actually believe that increasing the price of imports will help the American economy is unimportant. What matters is whether their potential voters believe it is true.

Once they are in office they don’t actually have to keep their word and implement the bad policy. And if they do,what does it matter if the poor have to suffer? The presidency is an attractive prize and worth whatever cost the poor and working class have to pay to help them get to the Oval Office.

*Two of the other major candidates, Ted Cruz and Marco Rubio, prefer to decrease or eliminate tariffs. It’s hard to tell where Hillary Clinton stands. She has flip-flopped on the issue of free trade so often that it’s difficult to know where she has landed at any particular time.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
“Out of The City of Nazareth…”
If you listen to the radio, you’ve probably noticed mercials promoting the U.S. Census. Where I live, stations are intermittently mercials for the 2010 Census almost every time I’ve turned the dial. One of mercial messages contains a story about crowded buses and the need for folks munities plete the census so they get more money from the federal government and can buy more buses. Huh? The advertising budget just to promote this enterprise was initially publicized at $350 million....
Melanchthon on the Gospel’s Social Implications
The hugely influential reformer Philip Melanchthon (1497-1560) writes in mentary on Romans 13: Meanwhile, the Gospel teaches the godly properly about spiritual and eternal life in order that eternal life may be begun in their hearts. In public it wants our bodies to be engaged in this civil society and to make sure of mon bonds of this society with decisions about properties, contracts, laws, judgments, magistrates, and other things. These external matters do not hinder the knowledge of God...
NIV Stewardship Study Bible: ‘A remarkable resource…’
Rev. Jerry Hoffman, Director of the Center for Stewardship Leaders at Luther Seminary, reviews the NIV Stewardship Study Bible. “What I found was a remarkable resource that leads one to see how strong the stewardship thread exists throughout scripture…. I anticipate using this resource in my writing, preaching and teaching,” he says. To keep abreast of the different resources available on stewardship, e of a fan of the NIV Stewardship Study Bible on Facebook and follow the Twitter feed @Oikonomeo,...
What do you mean by ‘social justice’?
On NRO, John Leo points out how Glenn Beck missed the mark in his recent criticism of “social justice” churches (the reductio ad Hitlerum fallacy, again). But Beck is on to something, Leo says: When Glenn Beck urged Christians to leave churches that preach social justice, he allowed himself to be tripped up by conventional buzzwords of the campus Left. In plain English, “social justice” is a goal of all churches and refers to helping the poor and seeking equality....
The Perils of Obedience
On his blog, Marginal Revolution, Tyler Cowan links to an article about game show, The Game Of Death, that was recently broadcast on French television. According to the article (“Torture ‘Game Show’ Draws Nazi Comparison“) the program, “had all the trappings of a traditional television quiz show, with a roaring crowd and a glamorous and well-known hostess.” For all that it appeared to be a typical game show, what “contestants . . . did not realise [was that] they were...
Read My Lips
“…we are setting an ambitious goal: all students should graduate from high school prepared for college and a career – no matter who you are or where e from.” – Barack Obama, Saturday Radio Address. A few years ago I asked a friend and business owner why he put value on a college diploma when talking with entry level talent who had majored in subjects incredibly tangential to his job descriptions. He answered, “Well, it shows they can finish something.”...
What Griffiths Said
In this week’s Acton Commentary I expand on a minor meme floating around the web towards the end of last year that criticized the purported claim made by Lord Brian Griffiths, a Goldman Sachs advisor and vice chairman: “The injunction of Jesus to love others as ourselves is an endorsement of self-interest.” I do a couple of things in this piece. First, I show that Griffith’s claim was rather different than that reported by various news outlets. Second, I place...
Poll: Thumbs down on the Sin Tax
From “56% Oppose ‘Sin Taxes’ on Junk Food and Soft Drinks” on Rasmussen Reports: Several cities and states, faced with big budget problems, are considering so-called “sin taxes” on things like junk food and soft drinks. But just 33% of Americans think these sin taxes are a good idea. A new Rasmussen Reports national telephone survey shows that 56% oppose sin taxes on sodas and junk food. Twelve percent (12%) are undecided. Many of the politicians who are pushing these...
Catholic Health Care Rifts
As rumors of congressional action on health-care reform continue to swirl (it will happen Sunday, maybe?), fissures in the American munity are ing increasingly evident. The rift is highlighted in the current, in some ways unprecedented, public dispute between two important Catholic voices. By size and clout, the principal health-related organization of a Catholic identity is the Catholic Health Association. The official organ of the American Catholic bishops as a collective is the United States Conference of Catholic Bishops. Although...
Love Glenn Beck as you would love yourself
Acton es new blogger — and long time friend — Rudy Carrasco to the PowerBlog. He also writes at Urban Onramps. Don’t miss Rudy at Acton on Tap on March 31 (6 p.m. at Derby Station, East Grand Rapids, Mich.) — Editors +++++++++ I haven’t seen the video of Glenn Beck’s call to “run away” from churches that teach social justice. Nor have I read much on the responses by the many – see the Sojo God’s Politics blog for...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved