In today’s divided tribal society, the Heritage Foundation is the driving force behind intellectual conservative thought. The election is over, but we should still be aware of the Heritage Foundation’s futuristic plan, Project 2025, and what it states regarding taxes, tariffs, inflation and the deficit.
Trump believes tariffs are beautiful. Before the the election, he wanted a 60% tariff or more on China and 10% to 20% on other nations, like Canada and Mexico. On Feb. 1, via executive order, he announced tariffs to 25% for Canada and Mexico. And only 10% on China, not 60%. He subsequently delayed the tariffs on Canada and Mexico, but not China. On March 12, he imposed a 25% tariff on all foreign aluminum and steel.
Peter Navarro was Trump’s key first term fiscal adviser, presenting the protariff viewpoint, i.e., we must impose tariffs on major competitors. Navarro doesn’t acknowledge this is a tax on American consumers. However, China will not pay the tariff, passing the cost on to the buyer. An analysis by the Tax Policy Center estimated it would cost the average American family $1,800.
All economists know that tariffs are taxes, passed on to the buyer in the form of higher prices, spiking inflation. Inflation, a sore spot for families and the economy at large, would increase by 0.7 percentage points in the year after the tariffs are implemented, according to Mark Zandi, chief economist at Moody’s.
Plus, tariffs on China, Mexico and Canada would spark a massive international trade war.
Trump started a tariff skirmish with China in his first term. But then he gave U.S. farmers $20 billion in subsidies because of the negative effect it had on our agricultural exports to China.
We should note that both parties have a remarkable history of promising to balance the U.S. budget and then reneging on that vow when they are in office. Traditionally, Democrats have pushed increased social program funding to help targeted groups, such as lower-income Americas. Republicans have historically advocated for more military spending, and recently for an ineffective border wall.
Democrats have advanced progressive income tax structures whereby the wealthy and corporations pay more. Meanwhile, Trump and the MAGA GOP want to cut taxes for rich Americans and business, citing the disproved “trickle down” economic theory.
Trump’s 2017 tax cut resulted in 83% of the benefit going to corporate America and top income earners. The GOP has also often called for program cuts, often vaguely, and “elimination of waste and fraud,” often without specifics as to what can be done.
Supposedly, Musk’s DOGE is handling this issue, by randomly cutting key staff. But Congressional Republicans will not go along with cutting our military, Social Security and Medicare, the big-ticket items.
Both parties love to spend our money, while taxes aren’t raised, resulting in record deficits. Because of GOP tax cuts (and poor handling of the pandemic), Trump’s deficit hit an annual record of $3 trillion in 2020. Biden then increased spending to avoid a recession, overcompensating and contributing to inflation.
On the revenue side, Project 2025 wants to cut taxes on the wealthy. For example, “The system should allow immediate expensing for capital expenditures and index capital gains taxes for inflation.” (p. 696). And it advocates for politicizing the IRS agency by having many of its higher-level officials appointed rather than the civil servant tax experts now in place. The Trump administration is following this playbook.
To offset these tax reductions, Project 2025 advocates for a “consumption tax” on goods and services (p. 698). This national sales tax would be regressive and unpopular. The people on the bottom of the income scale would pay a much larger proportion of their income versus the rich.
The document does not recognize the fact that the deficit grew greatly throughout the Trump years. Overall, our national debt increased from $19.95 trillion to $27.75 trillion — a $7.8 trillion increase during Trump’s first term.
Instead, the document misleadingly states “the Trump Administration cut taxes and eliminated unnecessary regulations, creating a growing economy” (p. 885). If the recommendations embodied in Project 2025 and voiced by President Trump were to be enacted, we can expect our national debt to skyrocket even higher during Trump’s second term.
Credit: Courtesy Photo
Credit: Courtesy Photo
Jack Bernard, a retired business executive and former chair of the Jasper County Commission and Republican Party, was the first director of health planning for Georgia.
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