Democratic lawmakers introduce Tariff Tax Transparency Act

Two state Democratic lawmakers are targeting what they call “hidden taxes” on everyday goods, introducing legislation that would require retailers to itemize the cost of federal tariffs on consumers’ receipts.

Sen. Brad Pfaff (D-Onalaska) and Rep. Andrew Hysell (D-Sun Prairie) are circulating draft legislation that would require large retailers in Wisconsin to identify tariffs assessed to goods purchased by consumers through a separate line item on sales receipts and invoices.

The lawmakers say their Tariff Tax Transparency Act would make sure consumers know exactly how much of their grocery bill, appliance, or hardware store purchases are driven by federal tariff policy.

Pfaff and Hysell say tariffs are at levels not seen since 1933, and they point to an estimate by financial services firm Goldman Sachs that American households will pay an extra $2,400 in costs this year alone because of the tariffs, which they say are nothing more than taxes businesses pay to the government and then often pass along to consumers. 

“Wisconsin taxpayers have a right to know what tariffs they are paying for because a hidden tax is still a tax,” Hysell said. “Tariffs on the purchase of back-to-school supplies increase costs for moms and dads. Tariffs on vehicles mean larger car payments. The Tariff Tax Transparency Act will empower consumers to understand the federal tax on the goods they purchase.”

With prices increasing, Hysell said Wisconsinites need as much information as possible to make financial decisions that are the best for them and their families.

Pfaff said new tariffs are behind a surge in inflation.

“Washington’s tariffs are driving up costs for everyone in Wisconsin,” Pfaff said. “It’s time to pull back the curtain and show people exactly how much these hidden taxes are adding to their bills.”

The proposal would apply to retailers with annual sales of consumer goods exceeding $3 million. The proposed bill mimics Democratic legislation in states around the country, as well as federal legislation.

Grocers are wary

Together, the state and federal bills reflect a growing effort by Democrats to make tariff costs a political issue heading into 2026, but the push to require itemization of tariffs on retail receipts wasn’t getting universal backing. 

The Wisconsin Grocers Association issued a statement this week, warning that the plan would add layers of cost and confusion and would actually create more red tape for retailers.

“The net effect of the Tariff Tax Transparency Act will be additional costs and greater regulatory burden, not clarity,” the grocers declared.

In addition, the group asserted, it won’t be easy to calculate the exact tariff cost.

“Many elected officials who are upset about federal policy are struggling to determine the impact on pricing,” the association stated. “It’s complex, confusing, and main street grocers are doing their best to figure it out.”

The grocers observed that the bill applies to retailers who sell an arbitrary amount of goods, in this case $3 million. And while the group said it might sound simple to itemize federal tariff costs on every sales receipt, it would be anything but.

“In reality, tariffs are baked into wholesale costs, buried in supply chain negotiations, and scattered across thousands of products,” the association stated. “Asking retailers to extract and display this data is impractical and costly, making compliance almost impossible.”

Implementing the requirement would also mean that many businesses would have to make major upgrades to retail systems and production technology just to track tariff costs buried deep in the supply chain. 

“It would also demand extra staff time to chase down pricing details that suppliers often don’t even share or maybe even have — adding complexity and cost to every transaction,” the association stated.

What’s more, the group added, Wisconsin retailers and ultimately Wisconsin consumers will pay for those compliance costs. Add to that a significant chance that the bill would mislead shoppers.

“Prices are influenced by everything from fuel surcharges to labor costs to weather disruptions,” the association stated. “Singling out tariffs oversimplifies a complex reality and turns receipts into political commentary.”

The group urged lawmakers to reconsider placing the burden of federal tax transparency on local businesses: “If legislators want to know more about tariff impacts, we suggest working with members of Congress on the act.”

In Congress, U.S. Rep. Jamie Raskin (D-Maryland) has introduced the Truth in Tariffs Act, which also requires large retailers to clearly display the portion of an item’s price attributable to tariffs.

“President Trump has thrust our economy into turmoil, hiking up costs, roiling markets, and leaving consumers and businesses reeling from the uncertainty and havoc wrought by his reckless Trump tariffs,” Raskin said. “President Trump’s universal tariffs constitute an effective national sales tax, which hurts working families the most. If the President and his government of billionaires are going to force American families to pay a lot more money for fewer available goods, the people have a right to know just how much of this new price burden stems directly from the President’s actions.” 

Raskin pointed to a Penn Wharton University of Pennsylvania budget model report that showed that Trump’s tariff plan, as of this past April, was projected to raise significant revenue — more than $5.2 trillion over 10 years, which the report stated could be used to reduce federal debt and encourage private investment. 

However, the model reported that tariffs would reduce GDP and wages by more than twice as much: “All future households are worse off. The estimated economic declines are likely lower bounds, with actual declines potentially even larger.”

According to the model, larger tariffs reduce the openness of the economy, including international capital flows. 

“This is especially costly under the nation’s current baseline debt path, which is increasing faster than GDP, that is generally excluded from trade models or treated as neutral,” the model stated. “U.S. households would need to purchase more bonds, requiring bond prices to fall (yields increase), domestic capital investment prices to fall (the marginal product of capital increases), or both. Even conservatively assuming only domestic capital investment prices fall, the reduction in economic activity is more than twice as large as a tax increase on capital returns that raises the same amount of revenue.”

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.