Just curious If tariffs are a tax on consumers, and taxes are generally deflationary, why are tariffs considered inflationary? byu/Jin1231 inAskEconomics Posted by Jin1231
EconomistWithaD on October 24, 2025 9:27 pm 1. From Blinder, in 1972, who correctly notes that taxes are not inflationary or deflationary per se. It depends on the relative magnitude of supply side and demand side effects, as well as the type of tax. https://www.princeton.edu/~erp/ERParchives/archivepdfs/M134.pdf Edit: here is an AEA paper that finds that while the personal income tax is deflationary, the corporate income tax is not. https://www.aeaweb.org/articles?id=10.1257/pandp.20231070 2. Tariffs don’t have to be a tax on consumers. Domestic businesses and importers both can theoretically bear the burden.
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1. From Blinder, in 1972, who correctly notes that taxes are not inflationary or deflationary per se. It depends on the relative magnitude of supply side and demand side effects, as well as the type of tax.
https://www.princeton.edu/~erp/ERParchives/archivepdfs/M134.pdf
Edit: here is an AEA paper that finds that while the personal income tax is deflationary, the corporate income tax is not.
https://www.aeaweb.org/articles?id=10.1257/pandp.20231070
2. Tariffs don’t have to be a tax on consumers. Domestic businesses and importers both can theoretically bear the burden.