Donald Trump said yesterday that he intended to use prices income to finance a significant reduction in federal taxes.
He announced it with a laconic post On his social network, the truth, in which he does not explain in detail how he intends to proceed.
The tax reduction: the good side of Trump's prices?
It is not difficult to imagine how he intends to proceed.
In fact, if the income from prices were to be substantial and continuous, they would produce an excess of strike in the chests of the federal state. Therefore, if Trump was to opt for a tax reduction, lower income would already be covered by higher income from prices.
This would not mean a reduction in costs for taxpayers, because it would in fact be only the replacement of one tax by another, but it would partially pass the taxation of consumption income.
Although on the one hand, it is true that prices are paid by companies exporting goods and services to the United States, these costs are obviously reflected in American consumers who buy these goods and services, therefore a large part of the cost of prices is indeed paid by American consumers.
In other words, prices are in all respects a tax on the consumption of imported goods, while the federal taxes that Trump intends to reduce are mainly those on income.
Thus, at the end, some consumers will find themselves paying more taxes, while others will pay less.
Trump declaration: prices as a measure to reduce taxes
The President of the United States wrote that with the introduction of prices, the income taxes of many people will be considerably reduced.
In fact, he even adds that they could be completely eliminated.
Obviously, his words must always be taken with a grain of salt, since those who engage in politics often use lies for their own propaganda.
However, these declarations seem at least plausible.
However, Trump specifies that the initiative will only concern those who earn less than $ 200,000 per year, which is still a large part of the population, given that in the United States, the average annual income is just less than $ 70,000 per year.
In other words, wealthy Americans will continue to pay more or less the same income taxes, but moreover, they will also have to pay the additional cost introduced by prices on large products.
External tax collection
The President called this mechanism as “the external revenue service”, that is to say a kind of external tax perception.
In other words, he presents it as a tax applied to foreign entities, rather than for American citizens, but in this case, it is clear.
In fact, the cost of the prices will ultimately be paid almost entirely by the same American citizens, in particular by the rich, because in their case, it will not be funded by a tax reduction and will only be an additional cost to bear.
On the other hand, political propaganda is often made up of lies of this type, that is to say difficult to fully understand for those who have superficial knowledge or without having even slightly complex problems.
Rather, this is a change in taxation for less rich media in consumption income, in turn funded by an increase in taxation on consumption of the property off.
It is true that, in theory, to avoid this increase in consumption taxation, it would be enough to buy goods and services not imported, but in fact, it is also true that the United States does not produce all the goods they consume internally, and they will never do it. It will always be inevitable to import goods from abroad, including raw materials and semi-finished products, it will therefore be inevitable that for the well-off, taxation will increase and will not decrease.
It remains to be seen if for less rich groups, it will not increase, or even the decrease, or if the replacement of taxes on income by consumption taxes will always result in an increase in taxation, even if it is much more limited compared to that of the aisses.
The impact on the economy
Analysts and the market are more or less convinced that such an initiative will not be good for the American economy.
For example, bettors On Polymarket Most of them are still convinced that at the end of 2025, Trump's economic and commercial policies will send the United States into recession, and it is no coincidence that these probabilities have exceeded 50% just after the announcement of the so-called “reciprocal” prices of the president (which, in reality, are not reciprocal).
The circulating hypothesis is that in the end, in all, there will be no reduction in the average overall tax burden on the population, and in fact the most affected groups (the property OFF) will probably be forced to reduce consumption, which also reduces the circulation of money.
In addition, Trump's idea to provoke most of industrial production is considered anachronistic that it is essentially worried, that is to say comparable to an insane fantasy that will not produce substantial advantages.
On the other hand, autarchy over the centuries has already shown that it produces more damage than advantages, and it is extremely difficult to end differently this time.
