“Bring the Jobs Back” Through Tax Cuts, Not Tariffs | Opinion

The MAGA movement’s core commitment to bringing jobs back to America remains as potent as ever. But Donald Trump‘s emphasis on tariffs and mass deportation to accomplish this goal reflects outdated thinking that would ultimately hurt the very people he aims to help. There’s a far smarter way forward that could actually achieve his stated goals while avoiding the inflationary damage of trade wars and mass deportations—strategic corporate tax reform designed to reward companies that create American jobs for American citizens.

It has always been curious that Trump, a Republican, has been so enamored with tariffs given that they are a tax that is ultimately paid by American consumers. When Trump imposed tariffs during his first term, this increase in taxation meant that American households paid several hundred dollar more per year for goods. Moreover, tariffs encourage tit-for-tat retaliation from the countries we levy them against, which disrupts the supply chain and raises prices across the board globally. With inflation finally back down to a historically low level, the last thing we need to do is reignite what is essentially a fire that burns a hole in the pocketbooks of all Americans.

Another fatal flaw of tariffs that undermines their role in bringing back jobs is how they can be dismantled overnight by the next administration. Any company considering a major reshoring investment based on tariffs will factor in the very real possibility that those tariffs will probably disappear in four years or less. This inherent impermanence makes tariffs totally ineffective at driving long-term corporate decision-making regarding where to locate facilities and jobs.

Relatedly, Trump’s mass deportation plans suffer from similar practical problems that would do more harm than good for Americans. First, any operation that would deport millions of undocumented people would require massive government spending, with estimates ranging from $88-$315 billion a year, meaning it would be the most expensive non-defense discretionary spending item in the budget. Simultaneously, uprooting millions of workers, especially in the midst of what the U.S. Chamber of Commerce has declared to be a labor shortage, would also accelerate an inflationary spiral.

There is however an alternative approach that would achieve the MAGA goal of bringing back jobs for working class Americans by creating a new system of corporate tax incentives that directly rewards companies for employing American citizens in domestic facilities. Instead of punishing companies through tariffs, we incentivize the behavior we want to see more often. Carrots, not sticks, are how we bring back the jobs.

A major strength of this approach is that it could be passed through budget reconciliation and locked into the tax code, creating the kind of permanent policy certainty that drives corporate investment decisions. Even better, there’s next to no way you would see Democrats move to undo this policy the next time they get a governing trifecta, as it would be political suicide for them to overtly changed the tax code in a way that would virtually guarantee massive American job loss.

A plan such as this would fundamentally alter the calculus for major employers. Right now, they offshore jobs because the math works in favor of seeking cheaper labor abroad. Change the math through the tax code, and you’ll see companies racing to bring operations back to American soil and prioritizing American workers—not because we forced them, but because we made it good business. We should be creating aligned incentives that make hiring American workers the profit-maximizing choice if we want to get sustainable reshoring that actually sticks.

The costs of these corporate tax cuts would be more than justified by the economic growth generated by the return of manufacturing and service jobs, all for the benefit of American citizens. Unlike tariffs, which function as a tax on consumers, or mass deportation, which requires massive new government spending, this approach essentially pays for itself through increased economic activity and the multiplier effect of more Americans earning higher wages.

Trump’s instincts about the need to rebuild American manufacturing and prioritize American workers aren’t wrong. But his policy toolkit needs an upgrade suitable for 2025, not 1925. Strategic tax reform that rewards companies for creating American jobs would be far more effective than backwards-looking policies like tariffs and mass deportation.

Nicholas Creel is an associate professor of business law at Georgia College & State University.

The views expressed in this article are the writer’s own.