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To: DannyTN
You take the $ amount of imports x 10% (tariff increase). That is the amount that the tariff increase will generate.

And then you subtract out the higher domestic prices your new tax will cause, how many jobs will that cost?

39 posted on 01/29/2014 2:02:14 PM PST by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Toddsterpatriot
There won't be significant increases in domestic prices due to a tariff increase.

The tariff itself will cause up to 1.4% increase in the general price level. But that will be offset by the lowered income taxes. Taxpayers would have on average $1500 from lowered taxes to pay the increase costs of imports, if they choose to continue buying imports.

If a domestic product includes an imported component, it may go up, but only by the proportion that it has imports as components. And that is already factored in the general price increase above.

If a domestic product exists that currently competes against an import, then conceivably that domestic product could raise it's prices. But if they were competing profitably before, the increase would result in excess profits, and more domestic competitors would enter the market driving the price back down.\

40 posted on 01/29/2014 2:18:48 PM PST by DannyTN (A>)
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