Philip Raices
Unless you’re not a big TV watcher, or get your news on the net, or read, the tariffs that President Trump has initiated are having devastating and tumultuous effects on our markets here and abroad. The price of almost everything is and will be increasing as businesses have to adjust their prices in line with their costs to survive and still be profitable. Is this really the “no pain, no gain” scenario that Donald is pushing us towards. The stock market, just today, as I write this column at 11:26AM EST is down 1,084.02 (-2.29%) to 39,471.98, the S&P is down 169.98 to 5,226.54 (down -3.15%). By the end of Friday April 4th, the Dow was down 2,231 points at 38,314.86, the S&P down 322.44 at 5,074.08. It’s been a rough and wild ride the past week and there is no end in sight, if these tariffs continue.
The world markets are in turmoil and uncertainty and fear and the costs to the consumers will be monumental, especially in the purchase and/or leasing of cars, raising prices $5000-$15,000 (https://www.freep.com) . The ironic fact is that the effect will mostly hit many of those consumers that can least afford the devastating effects of increased prices and who voted for Trump. The autoworkers think and believe that the tariffs are a good thing. Republican strategists generally argue that tariffs create good jobs, increase economic growth, and decrease trade deficits as noted in Council on Foreign Relations
Unfortunately, it has been proven that it would take 5-10 years to have businesses construct the necessary infrastructure for those jobs. But more crucial are that our wages average $30 per hour as of mid 2024 and those in China are $7 per hour and even less in other developing countries. This huge spread between the country’s labor costs, converts into more economical prices today for consumers and better profits for corporations. Lastly, bringing jobs and businesses back, for the most part, will never happen and the current tariffs imposed will never, ever solve our problems. What it will do, as history and economists have shown us time and again, is increase the public’s costs of goods and services and inflation, across the board and the reducing the possibility of creating future wealth for the majority of American citizens.
Here is some history to understand a bit of our predicament. From 1789-1934, tariffs were supposedly used to protect American industries and businesses. But my thoughts are that this was specifically used to raise money to run our government, and I am not convinced that it had as much to do with protecting our economy and initially maybe that was the intent. However, to me, this was another form of “cash grabbing” as I would call it today against other countries. https://www.cato.org
Free trade for the most part, has always been a better path to pursue, a method that would keep the quality and quantity of goods flowing in a more seamless fashion with less bottlenecks and supply chain shortages. This would create fair and equal competition as to who could produce the quality and quantity of all goods for the globe to consume in a way that would benefit the masses. But today, it’s not about benefiting the people, but benefiting those corporations that only care about profits instead of balancing their bottom lines with the quality and quantity that consumers surely need and want. The real problem is other countries imposing tariffs on our goods instead of educating their population to compete with our workers, in producing quality products and paying their workers a fair wage, which is the greatest discrepancy in our competing with them.
The income tax was initially created by Abraham Lincoln and passed by Congress in 1862 as the Revenue Act of 1861, to cover the Civil War expenses incurred during that horrendous and incredibly sad time in our history. There were also real estate taxes and import tariffs levied too.
A minimum of fifty million dollars was needed to fund the war. Taxes levied were anywhere from 3% from $600-$10,000 of income, then from $10,000-$50,000 at 5% and over $50,000 at 7.5%. However, this raised $350,000,000 to pay for the costs of the Civil War. However, due to the backlash and unrest of this tax, it was repealed in 1870.
On February 3rd, 1913, the 16th Amendment was created allowing Congress to levy a federal income tax on all incomes. For more information, check out: https://www.reaganlibrary.gov
Finally, the big 64,000 question is whether or not the tariffs as they currently continue, will have a major long-term effect on our real estate industry e.g. sales, investments, purchases, rentals and leases of residential and commercial properties? Looking at the path of the stock market over the last 2 weeks, I think that it will. The losses and psychological effects of how consumers react just might have a dampening effect on our real estate in many parts of the U.S. For those that have the money, credit and cash to pay, it probably will not have as much of an effect. But as inventory grows, and demand cools just a bit, more negotiations on higher end properties will ensue as it will take longer to sell.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 43+ years experience in the Real Estate industry and has earned 3 significant designations:
(What I consider a Master’s degree in real estate) expert in consulting and completing international transactions.
Eco-friendly low carbon footprint construction with 3-D printed foundations, Solar panels, Geo-thermal HVAC/Heat Pumps).
He will also provide a copy of “Unlocking the Secrets of Real Estate’s New Market Reality, and his Seller’s and Buyer’s Guides for “Things to Consider when Selling, investing or Purchasing your Home.
He will provide you with “free” regular updates of what has gone under contract (pending), been sold (closed) and those homes that have been withdrawn/released or expired (W/R) and all new listings of homes, HOA, Townhomes, Condos, and Coops in your town or go to:
https://WWW.Li-RealEstate.Com and you can “do it yourself (DYI) and search at your leisure on your own. However, for a “FREE” no obligation/no strings attached 15-minute consultation, as well as a “FREE printout or digital value analysis of what your home might sell for in today’s market without any obligation or “strings” attached call him at (516) 647-4289 or email: Phil@TurnKeyRealEstate.com
You can now search at your leisure for properties at:
WWW.Li-RealEstate.com
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