logo
#

Latest news with #BudgetModel

How Trump's mass deportations could backfire on the American economy by shrinking paychecks
How Trump's mass deportations could backfire on the American economy by shrinking paychecks

Yahoo

time25-07-2025

  • Business
  • Yahoo

How Trump's mass deportations could backfire on the American economy by shrinking paychecks

President Donald Trump has promised to unleash an economic boom that will turbocharge growth, fatten paychecks and chip away at America's mountain of debt. However, a new analysis from Trump's alma mater suggests that his immigration crackdown – a centerpiece of his second term – could do the exact opposite. Trump's policy of mass deportations would shrink most worker paychecks, erode gross domestic product (GDP) and spike the already-massive federal government budget deficit, according to a Penn Wharton Budget Model analysis shared exclusively with CNN. 'There is no question the US economy will get smaller as you deport a lot of the workforce,' Kent Smetters, professor of business economics and public policy at the University of Pennsylvania's Wharton School, said in an interview. 'You simply have fewer bodies to produce. Fewer people means a smaller economy.' During the 2024 campaign, Trump vowed to wage the biggest domestic deportation program in American history and eventually expel millions of people. The Penn Wharton analysis found that a four-year policy in which 10% of the nation's unauthorized immigrants are removed per year would increase federal deficits by $350 billion, reduce GDP by 1% and dent the average worker's wages. The higher deficits are driven by a combination of lost revenue and new spending required to make mass deportations possible – on top of the funding for border security, interior enforcement and deportations provided by the tax and spending cuts package Trump signed into law this month. If the immigration crackdown spanned 10 years, the cost to the federal government would rise to $987 billion, GDP would shrink by 3.3% and wages would tumble by 1.7%, researchers found. Why many workers could get hurt by deportations That's not to say all workers would be harmed by the mass deportations. Penn Wharton concluded that authorized, lower-skilled workers – including US-born ones – would get a pay bump due to less competition. Wages for those authorized, lower-skilled workers would jump by 5% by 2034, the analysis said. However, if deportations are reversed after four years, wages for authorized low-skilled workers would eventually drop. 'Part of the promise of deportation is that those left behind are supposed to be better off. In reality, it's a much more mixed result,' Smetters told CNN. Penn Wharton found that the outcome for high-skilled workers is clearer: They'd be worse off. That's because unauthorized, low-skilled workers complement higher-skilled workers, defined in the analysis as native-born citizens, permanent residents and visa-holding immigrants with at least some college education. Higher-skilled workers 'are generally harmed by deportation more than authorized lower-skilled workers are helped,' the Penn Wharton analysis found, adding that higher-skilled workers have a bigger impact on paychecks and GDP and contribute more to taxes. High-skilled workers would suffer a $2,764 loss in annual wages on average if the immigration crackdown spanned 10 years, Smetters said. 'If you're middle class to higher income, you're going to be hurt by deportation because you rely on lower-skilled workers to make your job easier and to make your life more comfortable,' Smetters said. Many farmworkers are unauthorized For instance, he pointed to office workers who are helped by lower-skilled employees who clean buildings, do security and help transport people. Lower-skilled workers, at times unauthorized, play central roles in various industries, including construction, restaurants and manufacturing. This is especially true in agriculture. Between 2020 and 2022, about 39% of crop farmworkers were US citizens, while 19% were authorized immigrants. That means the rest – 42% – held no work authorization, according to the US Department of Agriculture. 'There are a lot of jobs in the US that native-born people don't want – and foreign-born people are happy to have,' said Stephanie Roth, chief economist at Wolfe Research. The White House pushed back against the Penn Wharton findings. 'These sort of pedantic analyses miss the forest for the trees by not accounting for the immense costs that everyday Americans are forced to bear due to illegal immigration: violent crime, rising housing costs, eroding social trust and even the overbearing of emergency rooms,' White House spokesman Kush Desai said in a statement to CNN. Desai pointed to research that finds more than one in ten young adults in the United States are neither employed, pursuing higher education nor in vocational training. 'There is no shortage of American minds and hands to grow our labor force,' Desai said, 'and President Trump's agenda to create jobs for American workers represents this administration's commitment to capitalizing on that untapped potential to build America's next Golden Age while delivering on our mandate to enforce our immigration laws.' It's true that some young people are having trouble finding jobs. The unemployment rate for those aged 20 to 24 stands at 8.2% as of June – more than twice as high as the national rate, according to the Bureau of Labor Statistics. 'We need immigration' However, it's also true that America's aging population creates real challenges for the economy and businesses. Economists fear that as Baby Boomers continue to retire, businesses will struggle to find workers, a problem that would be compounded by a loss of foreign-born workers. Roth, the Wolfe Research economist, worries that mass deportations, along with the Trump administration's decision to terminate the legal status of hundreds of thousands of migrants, will cause some worker shortages and lift prices for consumers. 'We need immigration. Foreign-born workers are critical to the labor force – especially in this environment where the population is aging,' Roth said. Joe Brusuelas, chief economist at RSM, said the Penn Wharton study 'illuminates just how critical rational immigration policy is to the wellbeing of the American economy.' He said the United States needs comprehensive immigration reform that features cross-border migration to support the labor needs of manufacturing, construction, agriculture and household maintenance as well as leisure and hospitality. The study 'strongly implies that the current path of immigration policy is not economically sustainable nor supportive of growth or narrowing budget deficits,' Brusuelas said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

How Trump's mass deportations could backfire on the American economy by shrinking paychecks
How Trump's mass deportations could backfire on the American economy by shrinking paychecks

CNN

time25-07-2025

  • Business
  • CNN

How Trump's mass deportations could backfire on the American economy by shrinking paychecks

Immigration Donald Trump Pay & incomeFacebookTweetLink Follow President Donald Trump has promised to unleash an economic boom that will turbocharge growth, fatten paychecks and chip away at America's mountain of debt. However, a new analysis from Trump's alma mater suggests that his immigration crackdown – a centerpiece of his second term – could do the exact opposite. Trump's policy of mass deportations would shrink most worker paychecks, erode gross domestic product (GDP) and spike the already-massive federal government budget deficit, according to a Penn Wharton Budget Model analysis shared exclusively with CNN. 'There is no question the US economy will get smaller as you deport a lot of the workforce,' Kent Smetters, professor of business economics and public policy at the University of Pennsylvania's Wharton School, said in an interview. 'You simply have fewer bodies to produce. Fewer people means a smaller economy.' During the 2024 campaign, Trump vowed to wage the biggest domestic deportation program in American history and eventually expel millions of people. The Penn Wharton analysis found that a four-year policy in which 10% of the nation's unauthorized immigrants are removed per year would increase federal deficits by $350 billion, reduce GDP by 1% and dent the average worker's wages. The higher deficits are driven by a combination of lost revenue and new spending required to make mass deportations possible – on top of the funding for border security, interior enforcement and deportations provided by the tax and spending cuts package Trump signed into law this month. If the immigration crackdown spanned 10 years, the cost to the federal government would rise to $987 billion, GDP would shrink by 3.3% and wages would tumble by 1.7%, researchers found. That's not to say all workers would be harmed by the mass deportations. Penn Wharton concluded that authorized, lower-skilled workers – including US-born ones – would get a pay bump due to less competition. Wages for those authorized, lower-skilled workers would jump by 5% by 2034, the analysis said. However, if deportations are reversed after four years, wages for authorized low-skilled workers would eventually drop. 'Part of the promise of deportation is that those left behind are supposed to be better off. In reality, it's a much more mixed result,' Smetters told CNN. Penn Wharton found that the outcome for high-skilled workers is clearer: They'd be worse off. That's because unauthorized, low-skilled workers complement higher-skilled workers, defined in the analysis as native-born citizens, permanent residents and visa-holding immigrants with at least some college education. Higher-skilled workers 'are generally harmed by deportation more than authorized lower-skilled workers are helped,' the Penn Wharton analysis found, adding that higher-skilled workers have a bigger impact on paychecks and GDP and contribute more to taxes. High-skilled workers would suffer a $2,764 loss in annual wages on average if the immigration crackdown spanned 10 years, Smetters said. 'If you're middle class to higher income, you're going to be hurt by deportation because you rely on lower-skilled workers to make your job easier and to make your life more comfortable,' Smetters said. For instance, he pointed to office workers who are helped by lower-skilled employees who clean buildings, do security and help transport people. Lower-skilled workers, at times unauthorized, play central roles in various industries, including construction, restaurants and manufacturing. This is especially true in agriculture. Between 2020 and 2022, about 39% of crop farmworkers were US citizens, while 19% were authorized immigrants. That means the rest – 42% – held no work authorization, according to the US Department of Agriculture. 'There are a lot of jobs in the US that native-born people don't want – and foreign-born people are happy to have,' said Stephanie Roth, chief economist at Wolfe Research. The White House pushed back against the Penn Wharton findings. 'These sort of pedantic analyses miss the forest for the trees by not accounting for the immense costs that everyday Americans are forced to bear due to illegal immigration: violent crime, rising housing costs, eroding social trust and even the overbearing of emergency rooms,' White House spokesman Kush Desai said in a statement to CNN. Desai pointed to research that finds more than one in ten young adults in the United States are neither employed, pursuing higher education nor in vocational training. 'There is no shortage of American minds and hands to grow our labor force,' Desai said, 'and President Trump's agenda to create jobs for American workers represents this administration's commitment to capitalizing on that untapped potential to build America's next Golden Age while delivering on our mandate to enforce our immigration laws.' It's true that some young people are having trouble finding jobs. The unemployment rate for those aged 20 to 24 stands at 8.2% as of June – more than twice as high as the national rate, according to the Bureau of Labor Statistics. However, it's also true that America's aging population creates real challenges for the economy and businesses. Economists fear that as Baby Boomers continue to retire, businesses will struggle to find workers, a problem that would be compounded by a loss of foreign-born workers. Roth, the Wolfe Research economist, worries that mass deportations, along with the Trump administration's decision to terminate the legal status of hundreds of thousands of migrants, will cause some worker shortages and lift prices for consumers. 'We need immigration. Foreign-born workers are critical to the labor force – especially in this environment where the population is aging,' Roth said. Joe Brusuelas, chief economist at RSM, said the Penn Wharton study 'illuminates just how critical rational immigration policy is to the wellbeing of the American economy.' He said the United States needs comprehensive immigration reform that features cross-border migration to support the labor needs of manufacturing, construction, agriculture and household maintenance as well as leisure and hospitality. The study 'strongly implies that the current path of immigration policy is not economically sustainable nor supportive of growth or narrowing budget deficits,' Brusuelas said.

How Trump's mass deportations could backfire on the American economy by shrinking paychecks
How Trump's mass deportations could backfire on the American economy by shrinking paychecks

CNN

time25-07-2025

  • Business
  • CNN

How Trump's mass deportations could backfire on the American economy by shrinking paychecks

President Donald Trump has promised to unleash an economic boom that will turbocharge growth, fatten paychecks and chip away at America's mountain of debt. However, a new analysis from Trump's alma mater suggests that his immigration crackdown – a centerpiece of his second term – could do the exact opposite. Trump's policy of mass deportations would shrink most worker paychecks, erode gross domestic product (GDP) and spike the already-massive federal government budget deficit, according to a Penn Wharton Budget Model analysis shared exclusively with CNN. 'There is no question the US economy will get smaller as you deport a lot of the workforce,' Kent Smetters, professor of business economics and public policy at the University of Pennsylvania's Wharton School, said in an interview. 'You simply have fewer bodies to produce. Fewer people means a smaller economy.' During the 2024 campaign, Trump vowed to wage the biggest domestic deportation program in American history and eventually expel millions of people. The Penn Wharton analysis found that a four-year policy in which 10% of the nation's unauthorized immigrants are removed per year would increase federal deficits by $350 billion, reduce GDP by 1% and dent the average worker's wages. The higher deficits are driven by a combination of lost revenue and new spending required to make mass deportations possible – on top of the funding for border security, interior enforcement and deportations provided by the tax and spending cuts package Trump signed into law this month. If the immigration crackdown spanned 10 years, the cost to the federal government would rise to $987 billion, GDP would shrink by 3.3% and wages would tumble by 1.7%, researchers found. That's not to say all workers would be harmed by the mass deportations. Penn Wharton concluded that authorized, lower-skilled workers – including US-born ones – would get a pay bump due to less competition. Wages for those authorized, lower-skilled workers would jump by 5% by 2034, the analysis said. However, if deportations are reversed after four years, wages for authorized low-skilled workers would eventually drop. 'Part of the promise of deportation is that those left behind are supposed to be better off. In reality, it's a much more mixed result,' Smetters told CNN. Penn Wharton found that the outcome for high-skilled workers is clearer: They'd be worse off. That's because unauthorized, low-skilled workers complement higher-skilled workers, defined in the analysis as native-born citizens, permanent residents and visa-holding immigrants with at least some college education. Higher-skilled workers 'are generally harmed by deportation more than authorized lower-skilled workers are helped,' the Penn Wharton analysis found, adding that higher-skilled workers have a bigger impact on paychecks and GDP and contribute more to taxes. High-skilled workers would suffer a $2,764 loss in annual wages on average if the immigration crackdown spanned 10 years, Smetters said. 'If you're middle class to higher income, you're going to be hurt by deportation because you rely on lower-skilled workers to make your job easier and to make your life more comfortable,' Smetters said. For instance, he pointed to office workers who are helped by lower-skilled employees who clean buildings, do security and help transport people. Lower-skilled workers, at times unauthorized, play central roles in various industries, including construction, restaurants and manufacturing. This is especially true in agriculture. Between 2020 and 2022, about 39% of crop farmworkers were US citizens, while 19% were authorized immigrants. That means the rest – 42% – held no work authorization, according to the US Department of Agriculture. 'There are a lot of jobs in the US that native-born people don't want – and foreign-born people are happy to have,' said Stephanie Roth, chief economist at Wolfe Research. The White House pushed back against the Penn Wharton findings. 'These sort of pedantic analyses miss the forest for the trees by not accounting for the immense costs that everyday Americans are forced to bear due to illegal immigration: violent crime, rising housing costs, eroding social trust and even the overbearing of emergency rooms,' White House spokesman Kush Desai said in a statement to CNN. Desai pointed to research that finds more than one in ten young adults in the United States are neither employed, pursuing higher education nor in vocational training. 'There is no shortage of American minds and hands to grow our labor force,' Desai said, 'and President Trump's agenda to create jobs for American workers represents this administration's commitment to capitalizing on that untapped potential to build America's next Golden Age while delivering on our mandate to enforce our immigration laws.' It's true that some young people are having trouble finding jobs. The unemployment rate for those aged 20 to 24 stands at 8.2% as of June – more than twice as high as the national rate, according to the Bureau of Labor Statistics. However, it's also true that America's aging population creates real challenges for the economy and businesses. Economists fear that as Baby Boomers continue to retire, businesses will struggle to find workers, a problem that would be compounded by a loss of foreign-born workers. Roth, the Wolfe Research economist, worries that mass deportations, along with the Trump administration's decision to terminate the legal status of hundreds of thousands of migrants, will cause some worker shortages and lift prices for consumers. 'We need immigration. Foreign-born workers are critical to the labor force – especially in this environment where the population is aging,' Roth said. Joe Brusuelas, chief economist at RSM, said the Penn Wharton study 'illuminates just how critical rational immigration policy is to the wellbeing of the American economy.' He said the United States needs comprehensive immigration reform that features cross-border migration to support the labor needs of manufacturing, construction, agriculture and household maintenance as well as leisure and hospitality. The study 'strongly implies that the current path of immigration policy is not economically sustainable nor supportive of growth or narrowing budget deficits,' Brusuelas said.

Trump's tariffs could pay for his tax cuts -- but it likely wouldn't be much of a bargain
Trump's tariffs could pay for his tax cuts -- but it likely wouldn't be much of a bargain

Japan Today

time14-06-2025

  • Business
  • Japan Today

Trump's tariffs could pay for his tax cuts -- but it likely wouldn't be much of a bargain

By PAUL WISEMAN Senate Majority Leader John Thune, R-S.D., pauses in the door of his office to answer questions from reporters about his strategy to advance President Donald Trump's spending and tax bill, at the Capitol in Washington. The tax cuts in President Donald Trump's One Big Beautiful Bill Act would likely gouge a hole in the federal budget. The president has a patch handy, though: his sweeping import taxes — tariffs. The Congressional Budget Office, the government's nonpartisan arbiter of tax and spending matters, says the One Big Beautiful Bill, passed by the House last month and now under consideration in the Senate, would increase federal budget deficits by $2.4 trillion over the next decade. That is because its tax cuts would drain the government's coffers faster than its spending cuts would save money. By bringing in revenue for the Treasury, on the other hand, the tariffs that Trump announced through May 13 — including his so-called reciprocal levies of up to 50% on countries with which the United States has a trade deficit — would offset the budget impact of the tax-cut bill and reduce deficits over the next decade by $2.5 trillion. So it's basically a wash. That's the budget math anyway. The real answer is more complicated. Actually using tariffs to finance a big chunk of the federal government would be a painful and perilous undertaking, budget wonks say. 'It's a very dangerous way to try to raise revenue,' said Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model, who served in President George W. Bush's Treasury Department. Trump has long advocated tariffs as an economic elixir. He says they can protect American industries, bring factories back to the United States, give him leverage to win concessions over foreign governments — and raise a lot of money. He's even suggested that they could replace the federal income tax, which now brings in about half of federal revenue. 'It's possible we'll do a complete tax cut,'' he told reporters in April. 'I think the tariffs will be enough to cut all of the income tax.'' Economists and budget analysts do not share the president's enthusiasm for using tariffs to finance the government or to replace other taxes. 'It's a really bad trade,'' said Erica York, the Tax Foundation's vice president of federal tax policy. 'It's perhaps the dumbest tax reform you could design.'' For one thing, Trump's tariffs are an unstable source of revenue. He bypassed Congress and imposed his biggest import tax hikes through executive orders. That means a future president could simply reverse them. 'Or political whims in Congress could change, and they could decide, 'Hey, we're going revoke this authority because we don't think it's a good thing that the president can just unilaterally impose a $2 trillion tax hike,' '' York said. Or the courts could kill his tariffs before Congress or future presidents do. A federal court in New York has already struck down the centerpiece of his tariff program — the reciprocal and other levies he announced on what he called 'Liberation Day'' April 2 — saying he'd overstepped his authority. An appeals court has allowed the government to keep collecting the levies while the legal challenge winds its way through the court system. Economists also say that tariffs damage the economy. They are a tax on foreign products, paid by importers in the United States and usually passed along to their customers via higher prices. They raise costs for U.S. manufacturers that rely on imported raw materials, components and equipment, making them less competitive than foreign rivals that don't have to pay Trump's tariffs. Tariffs also invite retaliatory taxes on U.S. exports by foreign countries. Indeed, the European Union this week threatened 'countermeasures'' against Trump's unexpected move to raise his tariff on foreign steel and aluminum to 50%. 'You're not just getting the effect of a tax on the U.S. economy,' York said. 'You're also getting the effect of foreign taxes on U.S. exports.'' She said the tariffs will basically wipe out all economic benefits from the One Big Beautiful Bill's tax cuts. Smetters at the Penn Wharton Budget Model said that tariffs also isolate the United States and discourage foreigners from investing in its economy. Foreigners see U.S. Treasurys as a super-safe investment and now own about 30% of the federal government's debt. If they cut back, the federal government would have to pay higher interest rates on Treasury debt to attract a smaller number of potential investors domestically. Higher borrowing costs and reduced investment would wallop the economy, making tariffs the most economically destructive tax available, Smetters said — more than twice as costly in reduced economic growth and wages as what he sees as the next-most damaging: the tax on corporate earnings. Tariffs also hit the poor hardest. They end up being a tax on consumers, and the poor spend more of their income than wealthier people do. Even without the tariffs, the One Big Beautiful Bill slams the poorest because it makes deep cuts to federal food programs and to Medicaid, which provides health care to low-income Americans. After the bill's tax and spending cuts, an analysis by the Penn Wharton Budget Model found, the poorest fifth of American households earning less than $17,000 a year would see their incomes drop by $820 next year. The richest 0.1% earning more than $4.3 million a year would come out ahead by $390,070 in 2026. 'If you layer a regressive tax increase like tariffs on top of that, you make a lot of low- and middle-income households substantially worse off,'' said the Tax Foundation's York. Overall, she said, tariffs are 'a very unreliable source of revenue for the legal reasons, the political reasons as well as the economic reasons. They're a very, very inefficient way to raise revenue. If you raise a dollar of a revenue with tariffs, that's going to cause a lot more economic harm than raising revenue any other way.'' © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Trump's tariffs could pay for his tax cuts -- but it likely wouldn't be much of a bargain
Trump's tariffs could pay for his tax cuts -- but it likely wouldn't be much of a bargain

Boston Globe

time07-06-2025

  • Business
  • Boston Globe

Trump's tariffs could pay for his tax cuts -- but it likely wouldn't be much of a bargain

The Congressional Budget Office, the government's nonpartisan arbiter of tax and spending matters, says the One Big Beautiful Bill, passed by the House last month and now under consideration in the Senate, would increase federal budget deficits by $2.4 trillion over the next decade. That is because its tax cuts would drain the government's coffers faster than its spending cuts would save money. By bringing in revenue for the Treasury, on the other hand, the tariffs that Trump announced through May 13 — including his so-called reciprocal levies of up to 50% on countries with which the United States has a trade deficit — would offset the budget impact of the tax-cut bill and reduce deficits over the next decade by $2.5 trillion. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up So it's basically a wash. Advertisement That's the budget math anyway. The real answer is more complicated. Actually using tariffs to finance a big chunk of the federal government would be a painful and perilous undertaking, budget wonks say. 'It's a very dangerous way to try to raise revenue,' said Kent Smetters of the University of Pennsylvania's Penn Wharton Budget Model, who served in President George W. Bush's Treasury Department. Trump has long advocated tariffs as an economic elixir. He says they can protect American industries, bring factories back to the United States, give him leverage to win concessions over foreign governments — and raise a lot of money. He's even suggested that they could replace the federal income tax, which now brings in about half of federal revenue. Advertisement 'It's possible we'll do a complete tax cut,'' he told reporters in April. 'I think the tariffs will be enough to cut all of the income tax.'' Economists and budget analysts do not share the president's enthusiasm for using tariffs to finance the government or to replace other taxes. 'It's a really bad trade,'' said Erica York, the Tax Foundation's vice president of federal tax policy. 'It's perhaps the dumbest tax reform you could design.'' For one thing, Trump's tariffs are an unstable source of revenue. He bypassed Congress and imposed his biggest import tax hikes through executive orders. That means a future president could simply reverse them. 'Or political whims in Congress could change, and they could decide, 'Hey, we're going revoke this authority because we don't think it's a good thing that the president can just unilaterally impose a $2 trillion tax hike,' '' York said. Or the courts could kill his tariffs before Congress or future presidents do. A federal court in New York has already struck down the centerpiece of his tariff program — the reciprocal and other levies he announced on what he called 'Liberation Day'' April 2 — saying he'd overstepped his authority. An appeals court has allowed the government to keep collecting the levies while the legal challenge winds its way through the court system. Economists also say that tariffs damage the economy. They are a tax on foreign products, paid by importers in the United States and usually passed along to their customers via higher prices. They raise costs for U.S. manufacturers that rely on imported raw materials, components and equipment, making them less competitive than foreign rivals that don't have to pay Trump's tariffs. Advertisement Tariffs also invite retaliatory taxes on U.S. exports by foreign countries. Indeed, the European Union this week threatened 'countermeasures'' against Trump's unexpected move to raise his tariff on foreign steel and aluminum to 50%. 'You're not just getting the effect of a tax on the U.S. economy,' York said. 'You're also getting the effect of foreign taxes on U.S. exports.'' She said the tariffs will basically wipe out all economic benefits from the One Big Beautiful Bill's tax cuts. Smetters at the Penn Wharton Budget Model said that tariffs also isolate the United States and discourage foreigners from investing in its economy. Foreigners see U.S. Treasurys as a super-safe investment and now own about 30% of the federal government's debt. If they cut back, the federal government would have to pay higher interest rates on Treasury debt to attract a smaller number of potential investors domestically. Higher borrowing costs and reduced investment would wallop the economy, making tariffs the most economically destructive tax available, Smetters said — more than twice as costly in reduced economic growth and wages as what he sees as the next-most damaging: the tax on corporate earnings. Tariffs also hit the poor hardest. They end up being a tax on consumers, and the poor spend more of their income than wealthier people do. Even without the tariffs, the One Big Beautiful Bill slams the poorest because it makes deep cuts to federal food programs and to Medicaid, which provides health care to low-income Americans. After the bill's tax and spending cuts, an analysis by the Penn Wharton Budget Model found, the poorest fifth of American households earning less than $17,000 a year would see their incomes drop by $820 next year. The richest 0.1% earning more than $4.3 million a year would come out ahead by $390,070 in 2026. Advertisement 'If you layer a regressive tax increase like tariffs on top of that, you make a lot of low- and middle-income households substantially worse off,'' said the Tax Foundation's York. Overall, she said, tariffs are 'a very unreliable source of revenue for the legal reasons, the political reasons as well as the economic reasons. They're a very, very inefficient way to raise revenue. If you raise a dollar of a revenue with tariffs, that's going to cause a lot more economic harm than raising revenue any other way.''

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store