Latest news with #DisruptingTaxes
Yahoo
16-05-2025
- Business
- Yahoo
Here's Why Tariffs Will Benefit the Middle Class, According to Patrick Bet-David
President Donald Trump has announced a sweeping (though everchanging) tariff plan that he says will benefit American workers. Find Out: Read Next: 'Gone are the days of America being taken advantage of,' an official White House fact sheet states. 'This plan will put the American worker first, improve our competitiveness in every area of industry, reduce our trade deficit, and bolster our economic and national security.' On a recent episode of the 'PBD Podcast,' businessman and host Patrick Bet-David explained why he supports Trump's tariffs plan and how he believes they will ultimately benefit middle-class workers. While he acknowledges that tariffs may cause some financial struggles upfront, Bet-David believes the middle class will ultimately benefit from them. 'For the people that are … whining about tariffs — be patient,' he said on his podcast. Bet-David believes that tariffs will lead to more jobs coming back to the U.S., providing more earning opportunities for middle-class workers. He noted that over the past two decades, the wealth of the upper-class has grown exponentially, while middle-class wealth has remained relatively stagnant, and believes this is due to jobs being relocated abroad. 'What happened to our middle class since 2001? What was the average median income in 2001? [The] median income [in] 2001 [was] $42,000,' he said. 'Go look at what it is today. Twenty-five years later, it's not even double. It's gone up 80%.' While 80% might seem like a fair amount of growth, Bet-David noted that it's nothing compared to the explosion of wealth experience by the top 1% over the same time period. He shared that the richest man in 2001, Bill Gates, was worth around $53 billion. In 2025, the richest man is Elon Musk, who is worth $342 billion. 'So the wealthy 7X-ed [their wealth] but the median income only went up 80%,' he said. 'Why? Cheaper labor in China.' Learn More: Although Bet-David is confident that more domestic job opportunities that come as a result of tariffs will be a net positive for the middle class, not all experts agree with this take. Thomas J. Cryan, tax attorney and author of 'Disrupting Taxes,' previously told GOBankingRates that tariffs are likely to lead to higher prices on many everyday essentials and big-ticket purchases, raising the cost of living for middle-class Americans. 'A 25% tariff on imports will increase the cost of certain products, and will have a significant impact on consumer prices,' he said. 'Though exporters and middlemen might absorb some of the cost increase due to the tariffs, for the most part, the tariffs' costs are passed on to the consumer.' Cryan also believes that tariffs will actually lead to fewer jobs for the middle class — not more. 'Tariffs do not gain jobs but rather create inefficiencies within the economy that destroy jobs and hurt workers,' he said. 'Tariffs that protect certain industries — and jobs — will have the unintended consequences of harming other industries and the consumer via higher prices, which might slow down economic growth and trigger larger layoffs.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Here's How Much Cars Made in the US Cost Compared to Mexico, Canada and China 8 Common Mistakes Retirees Make With Their Social Security Checks 4 Grocery Items To Buy Now Before Tariffs Raise Prices This Summer 5 Types of Vehicles Retirees Should Stay Away From Buying Sources The White House, 'Fact Sheet: President Donald J. Trump Announces 'Fair and Reciprocal Plan' on Trade' PBD Podcast, 'The Rich Got Richer While the Middle Class Stagnated Since 2001' Thomas J. Cryan, 'Disrupting Taxes' This article originally appeared on Here's Why Tariffs Will Benefit the Middle Class, According to Patrick Bet-David Sign in to access your portfolio
Yahoo
22-03-2025
- Business
- Yahoo
Why Warren Buffett Thinks Tariffs Are ‘an Act of War' — And How He's Right or Wrong
In an interview with CBS News, billionaire investor Warren Buffett said, 'we've had a lot of experience with [tariffs]. They're an act of war, to some degree.' Many economists and international trade experts agree, even if they wouldn't put it so bluntly. Learn More: Consider This: Here's what the Oracle of Omaha means — and why most trade experts agree with him. When one country wants to force another to do something they don't want to do, they can use the threat of military force. Or they can use the threat of economic force, such as tariffs. 'Tariffs are designed not just to regulate trade but to force other nations into compliance,' explained George Carrillo, CEO of the Hispanic Construction Council. 'It typically provokes retaliation, where both sides strike back, ultimately launching a trade war.' And who pays for a trade war? The citizens of both countries — in the form of higher-cost goods. Read Next: When asked about tariffs' impact on inflation, Buffett replied: 'Over time, they are a tax on goods. I mean, the Tooth Fairy doesn't pay 'em.' Businesses that import goods don't just roll over and take the hit to their bottom line, either. They pass them on to consumers in the form of price hikes. 'Tariffs work like hidden taxes that raise prices on everything we use, from groceries to clothes to cars,' said Carrillo. 'Businesses face higher costs, jobs are lost, savings and retirement funds shrink in purchasing power. It makes you wonder: Why are we the ones paying the price for these political power struggles?' In his bestseller 'The World Is Flat,' Thomas Friedman popularized the Dell Theory of Conflict Prevention. It posits that no two countries that share major global supply chains have ever fought a hot war. If you hack apart those supply chains with tariffs, you not only launch a trade war but raise the risk of armed conflict. Fewer trade ties mean less economic incentive to keep the peace. John Anwesen, international trade attorney with Lighthill, expands on this point. 'People in countries that trade with one another meet, exchange ideas, engage in business, and develop mutual dependencies,' Anwesen said. 'Those interactions and interdependence makes them less likely to go to war.' Proponents of tariffs and trade wars argue that the U.S. has somehow gotten short shrift in international trade. But free trade has actually proven extremely kind to the U.S. economy, not just its trading partners. 'The U.S. has 20% of the world's GDP, 20% of the world's money supply, and 5% of the world's population,' noted Thomas J. Cryan, attorney and author of 'Disrupting Taxes.' 'The math tells us that international free trade has improved, and helped maintain, the U.S. economy.' One way that free trade helps both countries to grow their economies is through specialization. Ever try growing coffee beans in the U.S.? International trade isn't one-sided — it provides something of value to both parties. We wouldn't do it otherwise. 'Free trade allows countries to specialize in what they do well and trade for what they don't, and the result is a more efficient economy for all,' Cryan continued. 'The protection of a few jobs never outweighs the efficiency and cost reductions of lower prices for a broad spectrum of goods, and the creation of jobs elsewhere in the economy.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 4 Things To Watch for as Elon Musk Takes on Social Security I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money Warren Buffett: 10 Things Poor People Waste Money On 25 Creative Ways To Save Money This article originally appeared on Why Warren Buffett Thinks Tariffs Are 'an Act of War' — And How He's Right or Wrong Sign in to access your portfolio
Yahoo
17-03-2025
- Business
- Yahoo
Trump Wants To Replace Income Taxes With Tariffs: 2 Impacts on the Middle Class
No one likes taxes — especially President Donald Trump. If he has his way, income taxes will become a thing of the past, with tariffs making up that revenue. Trump Wants To Eliminate Income Taxes: 5 Ways This Could Impact Your Salary in 2025 Read Next: 'Donald Trump announced the 'External Revenue Service,' and his goal is very simple — to abolish the Internal Revenue Service and let all the outsiders pay,' Commerce Secretary Howard Lutnick told Fox News. While paying less in taxes might be music to your ears, if you're a member of the middle class, the reality might not be so rosy. Here's why tariffs could cause financial strain for middle-class earners. Trump's tariffs are likely to lead to higher prices on many everyday essentials and big-ticket purchases. 'The Trump administration rollout of tariffs on China, Mexico and Canada will create economic inefficiencies, which will raise prices,' said Thomas J. Cryan, tax attorney and author of 'Disrupting Taxes.' 'A 25% tariff on imports will increase the cost of certain products, and will have a significant impact on consumer prices,' he continued. 'Though exporters and middlemen might absorb some of the cost increase due to the tariffs, for the most part, the tariffs' costs are passed on to the consumer.' Cryan believes fruit and vegetable prices will be among the first category to increase. 'The U.S. imports 60% of all fresh fruits consumed and 30% of all fresh vegetables,' he said. 'Therefore, a 20%-25% increase in the price of fruits and vegetables, critical to keeping all families healthy, would be of great impact.' Check Out: Cryan believes that tariffs will lead to fewer available jobs for middle-class workers. 'Tariffs do not gain jobs, but rather create inefficiencies within the economy that destroy jobs and hurt workers,' he said. 'Tariffs that protect certain industries — and jobs — will have the unintended consequences of harming other industries and the consumer via higher prices, which might slow down economic growth and trigger larger layoffs.' Retaliatory tariffs — which have already begun rolling out — will exacerbate the issue, Cryan said. 'Retaliatory tariffs enacted by other countries will further spiral economic suppression and job loss,' he said. 'Jobs will be lost as tariffs shrink trade and throttle-back the economy. A concentrated special interest, such as protecting steel workers, should never prevail over the diffused general interest of all consumers across the country.' Cryan believes that the effect of tariffs will be felt more by the middle class than higher socioeconomic classes. 'Increased costs of daily necessities impacts the middle class and the working class the hardest, in that they have less disposable income,' he said. 'Specifically, it is important to recognize that the costs of tariffs do not impact the rich and the poor alike. Clearly, $1,000 means a lot more to a poor family working hard to cover all their bills than to a rich family with discretionary income. 'Economic studies have shown that the lower your income, the greater the impact of price increases due to tariffs,' Cryan continued. 'Ultimately, tariffs and trade wars are bad for everyone, and surely one can predict that such actions will result in a contraction of the GDP, which will trigger economic struggles and a tightening in the labor market.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 3 Changes That Could Be Coming to Social Security Now That Congress Is Republican This article originally appeared on Trump Wants To Replace Income Taxes With Tariffs: 2 Impacts on the Middle Class
