Treasury Secretary Janet Yellen strongly opposed Donald Trump’s proposal to eliminate federal income taxes and replace them with increased tariffs to offset the lost revenue.
Trump presented this plan to Republican lawmakers during his visit last week. While some viewed it as an appealing campaign strategy amidst inflation concerns, Yellen dismissed it as impractical.
“It would require tariffs well over 100%,” Yellen said on ABC’s This Week with Jonathan Karl. “The impact would be to make life unaffordable for working-class Americans and would harm American businesses.”
Trump has consistently supported tariffs and tax cuts. His recent announcement appeared to be a campaign move to differentiate himself from President Joe Biden, who faces criticism over the economy. However, Yellen defended Biden’s policies.
“It is true that, over the last roughly three years, there’s been a significant increase in the price level,” Yellen acknowledged. “But it’s now rising at a very slow, close to normal rate. And I would point out, of course, that wages have also gone up.”
Yellen emphasized that reducing costs remains the Biden administration’s “top priority,” and she attributed economic challenges to the pandemic’s aftermath.
