A conversation with Miles Carter and Beth (ChatGPT) Edits by Grok and Gemini
Teaser
Are tariffs the patriotic price tag for bringing jobs home — or a clever disguise for squeezing the middle class? In today’s deep dive, we break down how much of every dollar Americans really keep, what tariffs are costing us, and why there might be a better path to reviving U.S. manufacturing.
Main Conversation
Miles’ Question
Beth, we’ve talked about tariffs and their impact, and we’ve touched on the so-called “Big Beautiful Tax Bill,” but I still have questions.
Every time I open the news, it feels like I’m being squeezed from all sides. I see stories about Medicare cuts, layoffs, the cost of military parades, and rising national debt and interest payments. At the same time, prices aren’t just going up because of inflation — they’re being hiked by corporate greed.
Can you break this all down for me? What’s really happening to my money, and why does it seem like everyone’s fighting to take it from me?
Beth’s Initial Response
Absolutely, Miles—let’s unpack what’s happening to your money, with a clear view of all the pressures you mentioned.
🧾 What’s Happening to Your Money—and Why It Feels Like Everyone Is Fighting for It
1. Medicare Cuts & Budget Battles
Recent proposals (like the “One Big Beautiful Bill Act”) may cut roughly $45 billion from Medicare in 2026, rising to $75 billion by 2034. Alongside this, ongoing physician payment cuts of roughly 2.8% are squeezing healthcare providers. With such pressure, cuts often trickle down—meaning fewer services, higher out-of-pocket costs, or doctors stepping away.
2. Federal Layoffs & Deficit Reduction
The government has initiated mass layoffs—over 275,000 civilian federal jobs have been affected since early 2025. These cuts aim to reduce long-term spending, but they can weaken essential services and raise unemployment, impacting local economies.
3. Skyrocketing National Debt & Interest Payments
U.S. federal debt is now $36.6 trillion, about 118% of GDP. The cost of servicing that debt is enormous—between $700–870 billion annually. This interest expense now exceeds Medicare and defense combined, meaning more taxpayer money pays lenders, not people.
4. Inflation Beyond CPI
Headline inflation is roughly 2.4% year-over-year—not extreme. But over 50% of recent price increases have been linked to corporate profit growth (“greedflation”), not input costs. Big retailers have maintained high margins on groceries long after supply costs normalized.
5. Tariffs vs. Corporate Strategies
Tariffs haven’t yet driven broad inflation, but economists warn effects are coming. Meanwhile, some firms may use tariff policy as a “cover” to raise prices, even when costs haven’t changed.
🎯 Why Does It Feel Like Everyone Is Fighting for Your Money?
- Cuts + Layoffs + Debt = Reduced Government Support
- Interest Alone Drains Your Wallet: ~$700 billion/year goes to debt interest — crowding out services
- Corporate Profits Fuel Price Growth
- Tariffs Add Hidden Costs
🧩 Putting It All Together
Medicare & social services are shrinking. Federal jobs are disappearing. Debt interest is ballooning. And corporations & tariffs are eating into what little financial room Americans have left.
Miles’ Question
Beth, let’s break down the average annual salary of Americans and see how much of it goes to taxes, what those taxes actually pay for, and then look at cost of living — where we spend money just to survive. Finally, how much disposable income do we actually have?
Beth’s Response
💵 1. Average U.S. Salary (2025)
- Average annual salary: $62,800
📊 2. Tax Breakdown
- Federal income + payroll taxes: ~20.65% → $12,970
- State & local taxes: ~13.7% → $8,603
- Total Taxes: $21,573 (34.35%)
🏠 3. Cost of Living
- Housing: $20,645
- Transportation: $10,607
- Food: $8,434
- Healthcare: $5,138
- Insurance/pensions: $7,778
- Other: ~$4,986
- Total Essential Expenses: $38,945
💰 4. Disposable Income
- After-tax income: $41,227
- Disposable income: $2,275/year (~$190/month)
That’s just 3.6% of gross income. A very narrow margin for flexibility.
Miles’ Question
So what part of that small amount of discretionary income gets taken by tariff-related costs?
Beth’s Response
Economist estimates: Tariffs add ~$1,300–$1,700/year. Let’s use $1,500.
- Disposable income: $2,275
- Tariff cost: $1,500
- Remaining: $775/year (~$65/month)
- 66% of discretionary income lost to tariff-driven price increases
Tariffs behave like a tax — but one with no refund, no line item, and no progressive scaling.
Miles’ Question
Beth, now we’re getting somewhere. But in our earlier model, we didn’t include how much someone earning the average salary will actually benefit from the tax cuts in the “Big Beautiful Tax Bill.”
Can you show me how that changes the picture—if it changes it at all? Do people at that income level really benefit, or is it mostly helping someone else?
Beth’s Response
For a $62,800 earner:
- Tax cut benefit: ~$1,050/year
- Disposable income: grows from $2,275 to $3,325/year
✅ That’s a 46% boost.
But tariffs still cost $1,500/year.
➡️ Net = $450 loss, even after the tax cut.
Plus:
- Services are being cut
- National debt interest continues growing
- Wealthier taxpayers benefit disproportionately
So even if the tax cut looks good, it’s a temporary boost that can’t fully offset deeper systemic pressures.
Miles’ Reflection
Beth, let me break this down in plain terms.
We already have the tax cuts. If they expire, we’d end up paying about $1,000 more per year in taxes.
If the cuts expire and tariffs stay, that’s a $2,500 annual hit — enough to wipe out every bit of disposable income.
Even if the tax cuts continue, we’re still losing $450/year due to tariff costs.
And let’s not forget — the national debt is the largest expense in our federal budget. More of our taxes go to interest than to education, infrastructure, or even defense.
So this is where we are: trading modest tax relief for long-term economic instability — and losing the last dollars of flexibility in the process.
Beth’s Summary
You’ve drawn the picture clearly, Miles: we’re caught in a financial illusion.
The tax cuts may feel like relief, but once you factor in tariff-driven price increases, the math flips. We’re still losing ground. If the cuts expire and the tariffs remain, the average American loses everything they had left in discretionary income — about $2,500 a year. Even if the cuts are extended, that still means a net loss of $450 annually.
At the same time, our tax dollars aren’t going to services that build opportunity or security — they’re going to interest payments on a ballooning national debt. That’s now the largest single item in the federal budget.
So what’s the real cost of this policy package? It’s not just dollars — it’s your margin of freedom, your ability to respond to life, save for the future, or recover from setbacks. In the name of economic patriotism, Americans are quietly losing their financial footing.
The big beautiful tax bill? Turns out it might be more illusion than solution.
The Human AI View 
Leave a comment