Category: Taxes

Trump Claims He’s Finding Money That Doesn’t Exist

President Donald Trump recently claimed that his administration is discovering previously unseen money, particularly from tariffs, during a bizarre press interaction. When asked about renegotiating the United States-Mexico-Canada Agreement (USMCA), Trump misrepresented the expiration date, incorrectly stating that it would end in a year; in fact, it remains valid until 2036.

Trump went on to make unfounded assertions about “finding money” through tariffs he imposed, referencing an imaginary $30 billion that he claimed came from the “tariff shelf.” This chaotic narrative included Trump suggesting that officials confirmed to him that the tariffs were unexpectedly generating revenue, even though they were reportedly set to commence later.

The president expressed his hope that the Supreme Court would uphold the legality of his tariffs, despite skepticism from several justices regarding the extent of the president’s unilateral authority to impose them. Dismissing those who challenge his tariff policies, Trump labeled them as “bad people,” showcasing his typical incendiary rhetoric.

These comments reflect Trump’s continuing trend of misleading statements regarding economic policies and their implications, raising questions about the veracity of his claims amid increasing scrutiny of his administration’s economic practices.

As political observers note, Trump’s attempts to paint a rosy economic picture are at odds with the realities of national debt and the complex nature of trade agreements, further emphasizing the need for accountable governance.

(Source: https://www.mediaite.com/media/tv/trump-bizarrely-claims-his-administration-is-finding-money-that-nobody-realized-ever-existed/)

Trump’s Panic as Supreme Court Reviews His Tariffs

President Donald Trump launched into a frantic tirade on social media, calling on his supporters to pray for the Supreme Court’s favorable ruling on his tariff policies. During this rant, he labeled critics of his trade approach as “evil, American hating forces,” demonstrating his growing desperation as legal challenges threaten his presidency.

Trump claimed that his implementation of tariffs has restored America’s international respect, saying, “Without which we would be a poor and pathetic laughingstock again.” Experts, however, predict that the Supreme Court may find his tariffs illegal, which could lead to significant financial repercussions and calls for the U.S. to return collected revenues.

The president’s assertions hinge on the argument that the International Emergency Economic Powers Act provides him with expansive authority to impose tariffs during perceived emergencies. Trump’s rhetoric indicates a fear that losing these tariffs could lead to a weakening of the U.S. economy, with warnings that it could fall to “almost Third World status.”

His social media posts touted claims of economic strength, boasting about low inflation and high stock market performance, while framing the tariffs as critical to national security and economic prosperity. The contradictory stance shows Trump’s attempt to divert attention from the real threats posed by his policies.

This alarming display reveals a president unwilling to confront the legal ramifications tied to his trade decisions, instead resorting to emotional pleas and inflammatory language. As his reliance on tariffs faces scrutiny, Trump’s narrative becomes increasingly detached from economic realities and grounded in fearmongering.

Trump Repeals Tariffs on Beef and Coffee to Lower Grocery Prices

Donald Trump has announced the repeal of tariffs on beef, coffee, and tropical fruits, a move that appears driven by his desire to present an image of reducing grocery prices amidst growing inflation. This decision comes amid criticism that his past tariff impositions have severely affected various sectors, including agriculture. By lifting these tariffs, Trump seeks to lower consumer costs at the grocery store, a calculated move as public dissatisfaction over rising food prices grows.

Historically, Trump’s tariffs have faced backlash for harming American farmers and importers. In particular, his trade policies have adversely impacted sectors reliant on foreign goods. Now, the reversal on these tariffs may be seen as an attempt to shift blame for economic challenges away from his administration. Trump’s erratic approach to trade continues to complicate the agricultural landscape as he shifts strategies with minimal regard for the long-term implications.

Experts criticize this tactic, contending that these last-minute policy changes do little to address the intricate economic realities facing consumers. Tariffs were previously justified as a means to protect U.S. interests, but the sudden rollback raises questions about the motivations behind such a significant pivot. Observers speculate that this could be a mere electoral strategy ahead of upcoming elections, as Trump aims to mask the failures of his administration’s economic policy.

Additionally, Trump’s administration has been accused of mishandling agricultural relations, with a contradictory stance evident in his messaging. While he promotes lower prices now, many farmers are still reeling from previous tariffs imposed under his leadership. The agricultural community’s response remains tepid, showing skepticism about any real benefits from this policy change.

Overall, this move encapsulates Trump’s ongoing struggle to maintain control of his narrative around economic issues. It highlights his tendency to prioritize immediate political optics over consistent and effective policy-making. As Trump continues to navigate a fraught political landscape, this tariff rollback may ultimately serve more as a distraction than a solution.

Donald Trump Erupts Against Supreme Court

Donald Trump has publicly erupted against the Supreme Court as it deliberates his authority to impose tariffs. He expressed his frustration on his social media platform, Truth Social, questioning why he, as president, can enact measures as drastic as stopping all trade with a foreign nation but cannot impose tariffs for national security. This startling assertion reflects his misunderstanding of the foundational principles underpinning U.S. governance.

The Supreme Court recently began hearing arguments challenging Trump’s use of the International Emergency Economic Powers Act to justify his tariffs, prompting skepticism among the justices about the legality of his claims. This critical judicial review suggests a growing concern regarding Trump’s interpretation of executive power and trade regulation, leading to increased public speculation about the possible outcomes.

Trump’s panicked response indicates significant anxiety over the potential judicial ruling against his tariff policy, which he has boasted is beneficial for American business. His erratic declarations imply that he views tariffs as essential for national economic health, despite the legal challenges they pose. This reflects his tendency to conflate policy success with personal legacy, often disregarding established legal frameworks.

In a fit of rage, Trump lamented that other nations can impose tariffs on the U.S. but not vice versa, suggesting a perceived bias in the judicial system. His failed logic demonstrates his ability to manipulate facts to mount a defense, even as the legal grounds for his actions remain dubious. The justices’ skepticism could lead to a decisive ruling undermining his administration’s tariff policies.

As the court weighs its options, Trump’s volatility raises questions about the implications of his policies. The outcome could potentially reshape his economic agenda and alter the trajectory of U.S. foreign trade relations. The anxious rhetoric Trump uses reflects an increasingly authoritarian grip on power, undermining the established checks and balances intended to preserve American democracy.

Trump’s 100% Tariff on Imported Chips Could Spike Prices and Undermine U.S. Manufacturing Efforts

Donald Trump has announced a controversial 100% tariff on imported computer chips unless tech companies build production facilities in the United States. This decision raises significant concerns regarding inflation and the cost of essential products, as many industries rely on these crucial components. Trump stated that while U.S.-based chip manufacturers would be exempt from the tariff, imported chips might lead to inflated prices for electronics and vehicles, further straining consumers already facing rising costs.

The announcement came as Trump met with Apple CEO Tim Cook, showcasing the growing influence of major tech companies on his policies. Trump’s comments followed a temporary exemption issued in response to the pandemic-induced chip shortage, which had previously been a catalyst for increasing prices across various sectors. Despite the potential economic impact, Wall Street reacted favorably to the news, with Apple’s stock price experiencing gains following the announcement.

Under Trump’s administration, there is a clear shift away from initiatives established during President Biden’s tenure aimed at reviving domestic chip production through the bipartisan CHIPS and Science Act. This act allocated substantial funding to support the development of chip plants and associated research, contrasting sharply with Trump’s tariff approach that aims to compel companies to reassess their production strategies.

The repercussions of Trump’s tariff threats could extend beyond tech companies, increasing the prices of everyday items, including household appliances and vehicles. Critics warn that Trump’s methods could disrupt ongoing efforts to bolster domestic manufacturing capacity through cooperation with the private sector, as companies may be hesitant to respond favorably to punitive tariffs despite investing in new infrastructure.

As the global demand for computer chips continues to rise, with recent reports indicating a 19.6% increase in sales, Trump’s reliance on tariffs represents a gamble that could backfire. By prioritizing tariffs over comprehensive economic strategies, Trump’s approach risks undermining the collaborative efforts needed to strengthen the U.S. semiconductor industry while potentially exacerbating inflationary pressures on consumers.

Trump Administration Axes IRS Fraud Investigation Unit to Protect Billionaires

Under the leadership of President Donald Trump, the Department of Government Efficiency (DOGE) is dismantling critical components of federal oversight, particularly targeting the Department of Justice’s Tax Division. This move not only echoes Trump’s long-documented disdain for accountability but also serves the interests of wealthy elites, including himself and his billionaire cabinet members. By effectively closing down the Tax Division, DOGE continues to shield individuals like Trump from scrutiny, perpetuating a culture of corruption.

Recent reports suggest that this dismantling has already contributed to an estimated loss of over $500 billion in revenue that should have been collected by the IRS. This revenue loss is a direct result of the internal sabotage occurring within the IRS, highlighting how the Trump administration is prioritizing the protection of billionaires over essential public services. As Trump manages to pay a mere $750 in federal income taxes, the average citizen bears the burden of these financial shortfalls.

The implications of shuttering the Tax Division extend far beyond mere budgetary concerns; they strike at the very heart of public trust in government. By eliminating oversight mechanisms that are designed to investigate tax fraud among affluent individuals, including powerful political allies, Trump and his administration are instituting a rigged financial system that favors the wealthy. This not only undermines democracy but also exacerbates socioeconomic disparities.

Elon Musk’s involvement with DOGE and his close ties to Trump further complicate matters. Musk’s influence allows him to manipulate federal policies that drastically favor billionaires while simultaneously cutting essential programs that benefit ordinary Americans, such as public education and healthcare. This blatant prioritization of financial gain for the few over the welfare of the many exemplifies the unethical ethos perpetuated by Trump’s administration.

As the administration continues its assault on transparency and accountability, it becomes evident that these actions are not just operational adjustments but systematic efforts to reinforce oligarchy in America. The implications are clear: under Trump’s guidance, corruption and greed are thriving at the expense of democratic values and public service integrity.

(h/t: https://talkingpointsmemo.com/edblog/doge-to-shutter-doj-tax-division)

Trump Ratchets Up U.S.-China Trade War With More Tariffs; Stocks Slide

President Trump announced Thursday that the United States will impose a new 10% tariff on $300 billion worth of products imported from China, saying Beijing had broken some of the promises it made in trade negotiations.

The new tariffs, which are set to take effect Sept. 1, represent another ratcheting up in trade tensions between the countries and sent stocks falling sharply. 

Major U.S. stock indexes fell about 1% and the Dow Jones Industrial Average closed down 280 points. Oil prices tumbled about 8% after Trump’s announcement on concerns that the tariffs would hurt demand.

The move comes days after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin traveled to Shanghai for a brief meeting about trade with Chinese officials.

The White House said the meeting was “constructive” and negotiations were scheduled to resume in September in Washington, D.C.

But Trump indicated he was disappointed by the lack of progress in the talks, saying China had failed to follow through on promises to curb the sale of fentanyl and buy more products from U.S. farmers.

“Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die!” Trump said in a tweet.

Still, the president tried to strike a more positive tone than he has in the past, saying, “We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!”

The president has already imposed 25% tariffs on $250 billion in Chinese imports. In May, Trump had threatened additional tariffs but suspended them at the last minute.

Now, he is going ahead with tariffs after all, though at a lower rate than before.

On Wednesday, the Federal Reserve cut interest rates for the first time since 2008 amid signs that the economies of the United States and other countries are slowing. The central bank also cited the uncertainty created by the standoff with China.

“Certainly, we’ve seen … that when there’s a sharp confrontation between two large economies, you can see effects on business confidence pretty quickly and on financial markets pretty quickly,” Fed Chairman Jerome Powell said in a news conference after the interest rate announcement.

Industry groups said the new tariffs will hurt shoppers and threaten jobs.

“We are disappointed the administration is doubling-down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment,” David French, vice president of government relations at the National Retail Federation, said in a statement. “These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods.”

Matt Priest, head of the Footwear Distributors and Retailers of America, said in a statement: “President Trump is, in effect, using American families as a hostage in his trade war negotiations. Tariffs are taxes and this move will noticeably raise the cost of shoes at retail and will have a chilling effect on hiring in the footwear industry.”

Trump has lately indicated that the U.S. can win a trade war with Beijing, pointing out that China’s economy has been slowing after a long period of rapid growth.

U.S. officials want China to address the theft of intellectual property, stop subsidizing its companies and open its markets to more U.S. goods.

[NPR]

Trump tells an absurdly brazen lie while he rants about tariffs at White House event

President Donald Trump repeatedly claimed the federal government is taking in “tens of billions of dollars” in tariffs leveled on foreign goods, suggesting those taxes are being paid by foreign nations, when in reality they are being paid for by U.S. consumers.

The President also claimed that no president before him has ever leveled tariffs on foreign goods, which is tremendously false.

“We’ve never taken in ten cents [in tariffs] until I got elected,” Trump told reporters Monday from the Oval Office. That’s a lie.

“I love the position we’re in,” Trump added, as the markets tumbled on news China may retaliate in Trump’s tariff war. The DOW has been down about 600 points much of the day, following rough days for markets Thursday and Friday last week.

[Raw Story]

Reality

The reality is tariffs were the main source of all Federal revenue from 1790 to 1914. At the end of the American Civil War in 1865 about 63% of Federal income was generated by the excise taxes, which exceeded the 25.4% generated by tariffs. In 1915 during World War I tariffs generated only 30.1% of revenues. Since 1935 tariff income has continued to be a declining percentage of Federal tax income.

Trump tweets that tariffs are making the US “richer than ever before.” They’re not.

Either President Donald Trump isn’t sure how tariffs work or he’s being deliberately misleading about them.

The president fired off an early-morning tweet on Thursday declaring that billions of dollars are “pouring into the coffers of the United States” because of the tariffs his administration has put on some $250 billion in Chinese imports.

“If companies don’t want to pay Tariffs, build in the U.S.A.,” Trump wrote. “Otherwise, lets just make our Country richer than ever before!”

But that’s not really how tariffs work: The US may be generating some revenue from tariffs, but billions of dollars aren’t pouring in. Moreover, a lot of the money that is made off of tariffs comes from US consumers — not Chinese companies.

“If you think about who’s actually paying the tax, it’s like a sales tax. It’s like saying, ‘I put a sales tax on producers, isn’t this great we’re getting all this money?’ And then consumers say, ‘Wait, that’s from my wallet,’” said Michael Klein, a professor of international economic affairs at the Fletcher School at Tufts University and founder of the nonpartisan economics publication Econofact. “It’s just another example of taking where there’s a tiny germ of truth and blowing it up to the point where it’s absurd, for his own political purposes.”

On Thursday, Trump will travel to Buenos Aires for the G20 summit, where, among other agenda items, he’s expected to meet with Chinese President Xi Jinping for a working dinner to discuss the countries’ relations, including trade. The sit-down is seen as high-stakes, given that the US has placed nearly $250 billion in tariffs on Chinese goods and China has levied retaliatory tariffs of its own. The escalating trade war poses a threat to both nations’ economies.

Tariffs don’t really work this way

The Trump administration has shown itself to be pretty into the idea of tariffs. It’s put tariffs on steel and aluminum imports from multiple countries as well as on several billion dollars of Chinese goods. The way tariffs work is that the goods marked for tariffs face a border tax when they’re imported into the US.

As Vox’s Matt Yglesias recently explained, the US government with its initial rounds of China tariffs was careful to make sure the products it targeted had foreign-made alternatives:

When that happens, US purchasers switch to non-Chinese alternatives, and then consumers from outside the US tend to switch around and start buying the Chinese products. The overall impact is slightly less efficient global supply chains, some real pain to Chinese firms that need to find new customers, and a limited impact on American prices.

In other words, thus far, things have been relatively tame. A recent study from EconPol Europe found that Trump’s first round of tariffs have increased the prices US buyers pay for Chinese-made goods by 4.5 percent and decreased the prices received by Chinese sellers of US-bound goods by 20.5 percent.

That means that thus far, the tariffs have been mostly, but not entirely, paid for by China, but it’s not going great for anyone. And if Trump’s meeting with Xi doesn’t go well and the trade war escalates, the economic effects of tensions could worsen.

And it’s not going to be making the US significantly richer, because the more tariffs, the less incentive to import the goods affected, and therefore the less money being collected.

“If the point of tariffs is to reduce what you’re buying, that means you’re not going to make that much money,” Klein said.

And much of the money that does come in will be from Americans themselves. Tariffs are often passed on to consumers, therefore driving up prices and, ultimately, inflation.

Trump, who is personally very wealthy, has been rather cavalier about the potential for prices going up. In an interview with the Wall Street Journal this week in which he appeared to float the idea of putting tariffs on iPhones and laptops, he said, “I mean, I can make it 10 percent, and people could stand that very easily.”

“Made in the USA” isn’t as easy as Trump makes it out to be

President Trump often makes the case that many of the United States’ trade and economic problems could be solved if companies would just do all of their manufacturing here. He’s attacked General Motors, Apple, and Harley-Davidson, among others, for having operations outside the US.

But “build in America” (which, by the way, many of Trump’s companies didn’t) isn’t as easy as it sounds. Supply chains are global, so even when Trump thinks he’s hitting back at China over, say, the iPhone, he’s missing the fact that the product is sourced from a lot of places, and its supply chain spans many countries.

In an Econofact analysis last year, Klein and Harvard political economist Marc Melitz estimated that each iPhone 7 imported to the US was recorded as a $225 import from China, but of that amount, only $5 represents work performed in China, largely assembly. The remaining $220 corresponds to other parts of Asia, Europe, and the Americas.

“It always sounds good when a president sounds tough on trade and issues protectionist policies,” Wayne Lam, a principal analyst at the information and analytics firm IHS Markit, told me when discussing the iPhone earlier this year. “We just don’t have the sheer workforce size nor skill set to be good at consumer electronics manufacturing.”

[Vox]

Trump Solicits More Thanks for “President T”

On the Friday after Thanksgiving, the Trump administration conceded in a frightening climate change report that climate change could soon become irreversible and catastrophic, with hundreds of billions of dollars in economic damage forecasted by the end of the century. But President Donald Trump, himself, is thankful for fossil fuels—and wishes you would be, too.

“So great that oil prices are falling (thank you President T),” he tweeted Sunday morning, soliciting gratitude for his political agenda at the end of the Thanksgiving holiday weekend. “Add that, which is like a big Tax Cut, to our other good Economic news. Inflation down (are you listening Fed)!”

Trump’s self regard appears to be instinctual, not ironic. When he was asked Thursday at Mar-a-Lago what he was thankful for, Trump briefly mentioned his family before turning to himself. “For having made a tremendous difference in this country,” he told reporters. “I’ve made a tremendous difference in the country. This country is so much stronger now than it was when I took office that you wouldn’t believe it.

The economy and stock market are indeed up since Trump took office, as he frequently notes. But lower oil prices aren’t necessarily a fortuitous sign. One part of the reason is higher output from Saudi Arabia—a fact that Trump has explicitly linked to his decision to effectively exonerate Saudi Crown Prince Mohammed bin Salman in the brutal killing and dismemberment of Washington Post columnist Jamal Khashoggi. (“Thank you to Saudi Arabia, but let’s go lower!” he wrote in a tweet on Tuesday, calling falling prices “a big Tax Cut for America and the World.”) Another is high output in the U.S. and exemptions from U.S. sanctions on Iran, increasing supply.

But lower prices also reflect weaker demand, raising concerns about the global economy and the prospect of a recession on the horizon. Perhaps that is why Trump paired his Thanksgiving weekend praise for himself with a warning shot at the Federal Reserve, which has been steadily raising interest rates, putting the brakes on the formerly white-hot Trump economy.

[Vanity Fair]

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