WHITE HOUSE KNOCKS TRUMP TAX: Biden’s Council of Economic Advisers authored a report released Friday scrutinizing Donald Trump’s plan to abolish the federal income tax and make up the cost with tariff hikes. His proposal, the White House said, would court a global trade war that would send prices soaring. "It is mathematically unlikely that a broad tariff could ever replace the revenue raised by the individual income tax,” the economists wrote. But they attempted to quantify a replacement tariff rate anyway, predicting it “would likely need to be much larger than 70 percent to raise tax revenue that is equivalent.” The report comes as both candidates lean into trade policy for the 2024 campaign — and it’s the latest push from the Biden administration to draw a contrast between its targeted tariff increases and how the former president would handle the economy. The report follows criticism from economists’ across the political spectrum over Trump’s most hawkish plans, which also includes tariffs of 10 percent on all goods, 60 percent on China and up to 200 percent on Mexican autos. “An across-the-board 70 percent tariff would be required to replace the equivalent revenue raised by the individual income tax under the overly simplistic assumption that consumers, producers, and our trading partners would have made no changes to their behavior in response to the tariffs,” President Joe Biden’s Council wrote. However, since it does expect other factors to come into play — from changes in consumption patterns to massive retaliation — the Council said tariff rates, in actuality, would need to be “much larger.” The White House adds that Trump’s proposal would cause “substantial pressure on consumer prices” as costs rise for businesses that rely on imported goods. “Because lower-income households spend a larger share of their income on consumption of these goods, they will be disproportionately burdened by a broad tariff,” the Council adds. Reminder: Trump unveiled his plan to swap taxes with tariffs in conversations with lawmakers last month. But Trump campaign spokesperson Karoline Leavitt downplayed the proposal to your host as “one of many” ideas floated by the former president. Still, the new RNC platform pledged broader party support for Trump's aggressive trade positions ahead of the convention, which takes place this week. The party document indicated that GOP lawmakers will back Trump in imposing baseline tariffs, revoking China’s most favored nation status and phasing out imports of essential Chinese goods. "As tariffs on foreign producers go up, taxes on American workers, families, and businesses can come down," it adds, without elaborating further. The Trump campaign did not directly respond to a question about the analysis from Biden’s Council over the weekend. But it said in remarks sent to Morning Trade that "by cutting regulations and taxes and using the leverage of the United States to negotiate better trade deals around the world, President Trump built the strongest economy in American history."
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