TL/DR –
An analysis by the Institute on Taxation and Economic Policy found that taxes have increased for all income groups except the richest 5% of Americans, with the poorest Americans seeing the largest average increase. The increased taxes are largely due to tariffs imposed on imported goods and the ending of the Expanded Premium Tax Credit, which resulted in millions losing care and having to pay more out of pocket. Moreover, Trump’s policies have led to price hikes in goods and a spike in gas prices, negatively impacting the U.S. economy and middle-class families.
Despite claims from former President Donald Trump and Republican leaders about prioritizing tax relief for middle and working-class Americans, data shows that only the wealthiest have enjoyed tax cuts. In fact, according to an analysis by the Institute on Taxation and Economic Policy, taxes have risen for all income groups outside of the top 5%.
The largest increase was felt by those making between $0 and $27,000 per year, with an average tax hike of 3.1%. On the other end of the spectrum, those with an annual income surpassing $916,000 saw their taxes trimmed by 0.4%. A substantial factor contributing to the elevated taxes is the tariffs imposed on imported goods under the Trump administration.
These tariffs were initially presented as a tool to force foreign governments to open their markets to US-made goods. However, they have ultimately resulted in higher consumer costs. Despite the Supreme Court’s conservative majority declaring the method used by Trump to implement these tariffs as illegal, most of these cost increases have been maintained.
Furthermore, a tax hike was inadvertently brought about by Republican opposition to certain healthcare provisions. Specifically, the expiration of the Expanded Premium Tax Credit, initially established by Democrats and former President Joe Biden as part of the American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022. This credit had once made millions of Americans eligible for lower health insurance premiums. Its expiration has left many facing higher out-of-pocket costs.
Trump’s policies have also taken a toll on the U.S. economy. Common goods like groceries and video games have seen price increases as a result of the tariffs. Additionally, Trump’s decision to wage war against Iran resulted in a significant surge in gas prices, putting further strain on middle-class families.
Trump’s administration, notably filled with millionaires and billionaires, has come under criticism for favouring the wealthy. Notably, figures such as Elon Musk were given significant influence, leading to cuts in services used by millions, while receiving tax breaks.
Simultaneously, the Republicans limited access to healthcare as Trump invested in personal projects, such as a luxurious ballroom in the taxpayer-owned White House.
In the wake of these policies, recent elections have been unfavourable for the Republican party. The rising costs experienced by millions of Americans under their leadership has led to increased support for Democrats and progressive causes, suggesting potential difficulties for the GOP in future ballots.
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