By Ed Gresser
If you get irate over income or property taxes, don’t look down at your feet. You’ll feel worse if you do, because the costs that go into many Americans’ shoes contain the country’s most unfair taxes.
The American tariff system rarely draws attention. The Trump-era tariffs on metals and Chinese goods were unusual. They were hotly debated, drew foreign retaliation, and raised prices on many consumer goods and industrial inputs.
Those who investigate the permanent tariff system find a few predictable things: Tariffs are an inefficient form of tax that enable price increases without increasing supply or affecting demand, and they are a relatively small revenue source for the U.S. at about $85 billion in 2021. But they also find something both startling and grating: Tariffs are easily the most regressive of all U.S. taxes, forcing the poor to pay more than anyone else.
This is because permanent U.S. tariffs mostly tax a few basic household goods. Clothes, shoes, silverware, dinner plates and drinking glasses account for about 6% of imports, but (excluding the Trump tariffs) raise about half of all tariff revenue. This is because tariff rates on these products, which have hardly changed since the 1960s, average about 11%—compared with the 0.7% average for other goods.
