Surprise! A Border Adjustment Tax Screws the Poor and the Working Class.

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Kadee Russ, formerly a senior economist for the CEA and now a professor of economics at UC Davis, has taken a rough cut at the distributional effects of a border adjustment tax, the front-runner among “sort of a tariff” tax plans currently making the rounds in Congress. A BAT would supposedly raise about $200 billion per year, but raise it from whom? Here’s her estimate:

Isn’t that a shocker? It’s a regressive tax that hits the working class harder than it does the rich. What’s more, the whole point of imposing a BAT is to raise money so that personal income taxes can be slashed on the rich top marginal rates on job creators can be reduced. This whole Trump presidency thing is working out really well for the working class, isn’t it?

TECHNICAL NOTE: Russ calculated the cost of the tax by income decile. I merged her first eight deciles into four quintiles. Click the link to see her original estimates.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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