A report earlier this year from the Congressional Research Service indicated that the tax cuts signed into law in late 2017 by President Donald Trump did very little to actually spur economic growth for the year 2018.
While the economy grew by 2.9 percent that year, it had very little to do with those tax cuts, which Trump and other Republicans promised would help Americans overall, according to reporting from CNBC.
As if that wasn’t bad enough, it appears that now, thanks to Trump’s trade wars with various countries around the globe, any savings that middle-class families received from those tax cuts have now been mostly lost.
The average American family received $930 in yearly tax savings as a result of the Trump tax cuts. That amounts to a little more than $35 for every biweekly paycheck.
But according to a report from Bloomberg, all but $100 of those savings have been wiped out due to the costs of import tariffs that Trump has imposed.
In total, tariffs have cost the average household around $831 this year alone, according to figures from the New York Federal Reserve. Even though the tariffs themselves aren’t technically a tax on American workers, they do place a tax on imported goods, which gets passed down to the consumer.
“It’s giving with one hand and taking with the other,” Reed College economics Professor Kim Clausing said to the publication.
It might not stop there either: with more tariffs being proposed by the president against China and Mexico in the next month, Americans could actually end up spending more of their income.
Additional tariffs on $300 billion of Chinese goods are being considered by the administration, which could tack on close to another $2,300 of costs to consumers. Threatened tariffs to Mexico, if they reach the highest threshold Trump has warned about, could add another $1,700 in costs.
In all, the $930 in tax savings the average American received from the Trump tax cuts could wind up being wiped out completely, and then some, with their net losses from tariffs and tax cuts put together totaling around $3,900.
Featured image via Gage Skidmore/Flickr