Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.<\/p>\n
A new analysis from Yale’s Budget Lab shows that the sweeping tariffs imposed by President Donald Trump<\/strong> in 2025 act as a highly regressive tax<\/a>, hitting America’s poorest households more than three times harder than the richest.<\/p>\n According to the Nov. 17 update released on Monday, tariffs implemented this year will reduce after-tax income for the bottom 10% of households by 2.45% in the short run.<\/p>\n By contrast, the top 10% of earners will see their after-tax income fall by only 0.77% \u2014 a burden roughly one-third as severe.<\/p>\n Don\u2019t Miss: If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it<\/a>?<\/strong><\/p>\n University of Michigan economist Justin Wolfers<\/strong> highlighted the findings on X, posting the Yale chart and writing: “Trump’s tariffs are the most regressive tax in modern American history. The poorest tenth of Americans pay an effective tax rate more than triple that of the richest tenth.”<\/p>\n The Budget Lab’s modeling, built on the widely used GTAP framework, accounts for both higher consumer prices and behavioral substitution as households shift away from heavily taxed imports. Even after substitution, the regressive pattern holds firmly.<\/p>\n See Also: Fast Company Calls It a \u2018Groundbreaking Step for the Creator Economy’ \u2014 Investors Can Still Get In at $0.86\/Share<\/a><\/strong><\/p>\n In dollar terms, the average household in the lowest decile faces a real income loss of $920 in 2025 dollars, while the average top-decile household loses $3,871 \u2014 a larger absolute amount but a far smaller share of income.<\/p>\n The disparity arises because lower-income families spend a larger portion of their budgets on tariff-exposed goods such as clothing, footwear, electronics, and vehicles \u2014 categories that have seen effective tariff rates soar to levels not experienced since the early 20th century.<\/p>\n Story Continues <\/p>\n Yale researchers estimate the overall average effective U.S. tariff rate has jumped to 16.8% (pre-substitution) from roughly 2.4% at the start of 2025, the highest since the 1930s.<\/p>\n Separate long-run estimates show a 0.31% reduction in U.S. GDP and the loss of hundreds of billions in potential dynamic revenue as economic activity contracts.<\/p>\n The report also includes a legal contingency scenario assuming partial invalidation of tariffs<\/a> imposed under the International Emergency Economic Powers Act (IEEPA). Even in that case, the poorest households still face a tax burden 2.7 times higher than the richest.<\/p>\n The futures of the S&P 500, Nasdaq 100, and Dow Jones indices were trading lower on Wednesday, after closing lower for the second consecutive day this week on Tuesday.<\/p>\n The SPDR S&P 500 ETF Trust<\/strong> (NYSE:<\/a>SPY<\/a>) and Invesco QQQ Trust ETF<\/strong> (NASDAQ:<\/a>QQQ<\/a>), which track the S&P 500 index and Nasdaq 100 index, respectively, closed lower on Monday. The SPY was down 0.84% at $660.08, while the QQQ declined 1.22% to $596.31, according to Benzinga Pro<\/a> data.<\/p>\n Photo courtesy: Shutterstock\/ IAB Studio<\/p>\n Trending Now:<\/strong><\/p>\n Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That’s why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, professional financial guidance, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn’t tied to the fortunes of just one company or industry.<\/p>\n Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100<\/strong><\/a>. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.<\/p>\n For those seeking fixed-income style returns without Wall Street complexity, Worthy Property Bonds offers SEC-qualified, interest-bearing bonds starting at just $10<\/strong><\/a>. Investors earn a fixed 7% annual return, with funds deployed to small U.S. businesses. The bonds are fully liquid, meaning you can cash out anytime, making them attractive for conservative investors looking for steady, passive income.<\/p>\n Self-directed investors looking to take greater control of their retirement savings may consider IRA Financial. The platform enables you to use a self-directed IRA or Solo 401(k) to invest in alternative assets such as real estate, private equity, or even crypto<\/strong><\/a>. This flexibility empowers retirement savers to go beyond traditional stocks and bonds, building diversified portfolios that align with their long-term wealth strategies.<\/p>\n Moomoo isn’t just for trading \u2014 it’s also one of the most attractive places to park cash. New users can earn a promotional 8.1% APY on uninvested cash<\/strong><\/a>, combining a 3.85% base rate with a 4.25% booster once activated. On top of that, eligible new users can also score up to $1,000 in free Nvidia stock\u2014but the real draw here is the ability to earn bank-beating interest rates without having to move into riskier assets.<\/p>\n For investors concerned about inflation or seeking portfolio protection, American Hartford Gold provides a simple way to buy and hold physical gold and silver within an IRA or direct delivery<\/strong><\/a>. With a minimum investment of $10,000, the platform caters to those looking to preserve wealth through precious metals while maintaining the option to diversify retirement accounts. It’s a favored choice for conservative investors who want tangible assets that historically hold value during uncertain markets.<\/p>\n This article Top Economist Warns Trump Tariffs Effectively Impose Tax Rate On Low-Income Households That Is Triple Of High-Income Ones<\/a> originally appeared on Benzinga.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. A…\n","protected":false},"author":3,"featured_media":393948,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,69,79,4061,187048,187049,2175,36732,67,132,68],"class_list":{"0":"post-393947","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-donald-trump","10":"tag-economy","11":"tag-jeff-bezos","12":"tag-justin-wolfers","13":"tag-regressive-tax","14":"tag-tariffs","15":"tag-trump-tariffs","16":"tag-united-states","17":"tag-unitedstates","18":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115586087242164412","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/393947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=393947"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/393947\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/393948"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=393947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=393947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=393947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}