Tag Archives: Kimberly A. Clausing

“While income taxes have been the cornerstone of U.S. federal tax policy since the early 20th century, the Trump administration is shifting tax burdens away from income taxes and toward import taxes. Kimberly A. Clausing of the University of California, Los Angeles, and Maurice Obstfeld of the Peterson Institute estimate that a U.S. effective tariff rate of 20% would generate roughly $300 billion in revenue per year, which amounts to less than one-sixth of the revenue raised annually by personal income taxes. Tariffs also generate considerable deadweight losses—expanding import-competing sectors and shrinking export and non-traded goods sectors—that will amount to approximately $113 billion per year, or more than one-third of the revenue raised by the tariffs. Continue reading →