Think Tank Says Rolling Back Sections 232, 301, 201 Tariffs Would Increase GDP by 0.1 Percent
The Tax Foundation, a nonpartisan think tank that advances right of center tax policy, issued a lengthy report how Congress might consider changing the tax code for faster growth, for income distribution, or for reducing the deficit, noting that each change requires balancing trade-offs. For instance, the Foundation says that getting rid of safeguard tariffs on washing machines and solar panels, the Section 232 tariffs on metals, making permanent the pause in Airbus tariffs, and removing and the Section 301 tariffs on $475 billion worth of Chinese imports will mean a reduction in $79.5 billion in revenue next year, though the economists at the think tank estimated that the savings would spur enough economic growth that about $7 billion of that loss would be recovered with other taxes.
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“Repealing all the newly imposed tariffs would reduce federal revenues by $759 billion over the next 10 years. However, as tariffs increase the costs of imports to both consumers and producers, repealing them would increase long-run GDP by 0.1 percent,” they wrote. “On a distributional basis, all income quintiles would be impacted, but the bottom quintile would experience the largest change in after-tax income from repealing the tariffs, as their incomes would rise by 0.4 percent.”