Republican Tax & Service Cuts, Plus Trump Tariffs, Could Cost Employees in Heavily Latino Industries Up To Around $1,500 On Average Next Year

Latino workers and their families would pay a steep price for proposed Republican tax and service cuts, combined with President Trump’s tariffs, according to a new analysis by Americans for Tax Fairness (ATF). The average household in industries with heavy Latino representation would see their annual expenses go up by around $1,500 next year: those in the food, healthcare, maintenance, production and transport industries would on average face $1,430 in higher costs; those in construction and maintenance, $1,530. 

Those same GOP fiscal policies could boost the income of households making over roughly $915,000–a group with few Latino members–by more than $36,000. 

The ATF analysis combines a 2024 breakdown from the Institute for Taxation and Economic Policy (ITEP) of the impact by income level of proposed GOP economic policies with employment data from the U.S. Bureau of Labor Statistics (BLS). Because tax return data is not reported by race or ethnicity, the impact on Latino families was approximated by the impact on average-income workers in industries that employ the most Latino workers.

Under proposed GOP fiscal policies, average-income workers in the seven U.S. industries employing at least one million Latinos could face higher costs ranging from $1,430 to $1,530 in 2026. Latino workers made up at least a fifth of all workers in these industries–and as much as 40% or more in some–so Latino workers are likely to be hard hit by the Republican policies. 

The seven occupations are the following BLS categories (in order of Latino representation): construction and extraction; transportation and material moving; food preparation and serving related; building and grounds cleaning and maintenance; production; installation, maintenance, and repair; and healthcare support. The annual mean wage for those occupations ranged between $38,220 for healthcare support workers to $61,500 for construction and extraction employees.

Source: Americans for Tax Fairness

The GOP fiscal plans included in ITEP’s report were: extension of the expiring parts of the 2017 Trump-GOP tax law (except for the $10,000 limit on the deduction of state and local taxes, or SALT); exemption of tips, overtime pay and Social Security benefits from taxes; reduction of the corporate income-tax rate to as low as 15% for some companies; repeal of green energy credits; and the placement of 20% tariffs on all imported goods, except for those from China, which would face a 60% tariff. 

ITEP’s collection of fiscal policies is the most comprehensive available and most of its predictions have come true, but not all.  The expiring provisions of the 2017 law were extended and though the $10,000 SALT cap has disappeared, it was replaced (temporarily) with a $40,000 limit instead of no limit at all. Certain tips and overtime pay were exempted from tax, but Social Security payments were not, though lower-income taxpayers over 65 will receive a special (temporary) personal exemption. Certain auto-loan interest was made temporarily tax-free. The corporate income-tax rate was not changed.  

The biggest source of higher costs for Latino workers are Trump’s tariffs. It’s hard to say how close ITEP’s tariff prediction comes to actual policy, because that policy is in constant flux. Trump has proposed, delayed and revoked so many tariff plans that it’s impossible to know how things will stand even a few weeks in the future. But ITEP’s prediction still seems like a reasonable representation of Trump’s peripatetic policy. 

Following are more details about the components of the GOP fiscal agenda that will collectively cost Latino workers money: 

• Extension of the expiring parts of the 2017 Trump-GOP tax law (except for the $10,000 limit on the deduction of state and local taxes):  To hide the true cost of their 2017 tax law, Republicans made most of it temporary–scheduled to expire at the end of this year. But Trump and the GOP-controlled Congress extended those expiring parts, an extension that heavily favors the wealthy. The top 1% highest-income households (folks making over $915,000) would next year get an average tax cut of over $66,000. Latino workers in the seven industries reviewed here would generally receive little over $1.50 a day. 
• Exemption of tips, overtime pay and Social Security payments from taxes: All three of these proposals (including the revised benefit for older taxpayers) tend to offer the most to those who need it least (such as waiters at expensive restaurants) and the least to those who need it most (low-income Social Security recipients who already pay no tax on their benefits). Of the seven industries with the most Latino workers, only employees in part of one–food preparation and serving related–traditionally receive tips. 
• Lowering of the corporate income-tax rate to as low as 15% for some companies: Corporate tax cuts are tax cuts for the rich because the rich own corporations through their stock holdings. The wealthiest 10% of households owns 93% of all stock. The bottom 50%–where Latino workers tend to be found–owns just 1%. The most recent GOP tax bill did not change corporate tax rates, though it did grant businesses several expensive tax breaks. 
• Repeal of green energy credits: Part of the 2022 Inflation Reduction Act used tax credits to make sustainable energy more affordable for manufacturers and buyers. Trump and most other Republicans want to repeal those credits as part of getting rid of the whole law, which would have the effect of raising household utility bills. 
• 20% tariffs on all imported goods, except for those from China, which would face a 60% tariff: As of this writing, the base tariff on most imported goods is 10%, rather than the 20% ITEP predicted; and the general tariff on Chinese goods is 30% rather than 60%. But some imports from Canada and Mexico are hit with a 25% tariff, and Trump has recently threatened a 25% rate on goods from Japan and South Korea and 30% from the European Union–all major trading partners.Though targeted tariffs are an excellent tool for defending specific domestic industries and jobs from unfair foreign competition, Trump’s indiscriminate general tariffs will give corporations already gouging the American consumer an excuse to raise prices even further. Because lower-income shoppers like the Latino workers in this study spend a higher share of their income on consumption than do richer people, such tariff-induced inflation would act as a regressive sales tax on Latino families. 

Donald Trump and his fellow Republicans promised in their election campaigns last year to lower costs for American families, not raise them. Trump won a record share of Latino votes for a Republican presidential candidate at least partly on that promise. Now that they are in control of the federal government, though, Trump and the GOP are pursuing policies that will cut services and raise costs for Latino families–all to pay for tax cuts mostly benefitting households with incomes 20 times or so that of the average Latino worker. Like other working people, Latino families are sure to notice the discrepancy between what was promised and what’s being delivered.