May 28, 2015 10:29AM

Free Trade Is Good for Poor People

A piece in the New York Times today suggests that rich people are more likely than poor people to support free trade:

The Trans-Pacific Partnership trade deal making its way through Congress is the latest step in a decades-long trend toward liberalizing trade — a somewhat mysterious development given that many Americans are skeptical of freer trade.

But Americans with higher incomes are not so skeptical. They — along with businesses and interest groups that tend to be affiliated with them — are much more likely to support trade liberalization. Trade is thus one of the best examples of how public policy in the United States is often much more responsive to the preferences of the wealthy than to those of the general public.

Skepticism toward free trade among lower-income Americans is often substantial. Data from a 2013 CBS/New York Times poll show that 58 percent of Americans making less than $30,000 per year preferred to limit imports to protect United States industries and jobs, while only 36 percent preferred the wider selection and lower prices of imported goods available under free trade. But the balance of opinion reversed for those making over $100,000. Among that higher-income group, 53 percent favored free trade versus 44 percent who wanted to limit imports.

Similarly, a Pew Research Center survey released on Wednesday found that a plurality of Americans making under $30,000 per year say that their family’s finances have been hurt by free trade agreements (44 percent) rather than helped (38 percent). By contrast, those making more than $100,000 per year overwhelmingly believe free trade has been beneficial — 52 percent said trade agreements have helped their family’s finances versus only 29 percent who said they have hurt.

I am sometimes skeptical of polls on these issues, mainly due to badly phrased questions.  But regardless, I would be interested to see if the answers were affected by information on who actually pays the most in tariff revenue (as a percentage of their income), which, it turns out, is poor people:

Should a movie star’s maid pay higher sales taxes than her famous boss?

The truth is, she often does. She just doesn’t know it.

Low-income moms buying polyester shirts, plastic purses, and cheap canvas sneakers are unwittingly taxed five, ten, and sometimes even 30 times higher than movie stars shopping for silks, cashmeres, and snakeskin on Rodeo Drive. This is the hidden scandal of the American tariff system—a small and almost forgotten tax, which likely costs low-income families nearly $2 billion a year.

Because the tariff system raises most of its money from cheaper shoes and clothes, its tilt against the poor is especially steep—much steeper than that of any other federal tax. Each year, single-parent families spend about $13 billion buying clothes, shoes, and other home goods. Tariffs drive up the cost of these goods by about 15 percent, adding about $1.6 billion to the total bill.

So, the next time they conduct one of these polls on how people of different income levels feel about free trade, maybe give them these details first and then see how they answer.