Does Harris's 'Trump tax' claim stand up to scrutiny?published at 02:10 British Summer Time 15 October 2024
by Jake Horton
Earlier we heard Kamala Harris say a "Trump sales tax" - a reference to his tariffs plan - will cost US families almost $4,000 a year. We've heard this claim before - but does it stack up?
Economists say that tariffs - taxes on imported goods - can increase prices for consumers but it’s not guaranteed that they would go up by as much as Harris says.
The "almost $4,000" figure comes from analysis by the left-of-centre think tank the Centre for American Progress, external of Trump’s pledge to increase tariffs on all imported goods to 10-20%, and all goods imported from China to 60%.
They took the amount the US buys in goods from abroad annually, figured out how much the new taxes on these goods would be and divided this by the number of households in the US.
It works out at $4,600 per household, but when you look at “middle income” families you get a figure of $3,900 a year.
Other estimates are lower. The Peterson Institute reckons the impact, external would be closer to $1,700 a year (for tariffs at 10%) or $2,500 (at 20%).
Trump insists the cost of his tariffs would be felt by foreign countries instead, external.
It is difficult to assess the exact impact of these taxes but studies, on previous tariffs, have suggested that a lot of the economic cost was ultimately borne by American businesses and consumers.