Listeners might think that it is after listening to a segment this morning that discussed increased public opposition to trade in the context of the Republican presidential debate in Detroit tonight. They could have saved air time and increased accuracy by dropping the word "free." After all recent trade agreements have done little or nothing to remove barriers to trade in highly paid professional services, like physicians' and lawyers' services (or reporters' services), so they are really only about reducing some trade barriers. The upward redistribution discussed in the segment is not an accident, it is the expected outcome of such trade deals. These trade deals have also increased some protectionist barriers, most notably by applying U.S. style patent and copyright protection in the developing world. Therefore calling these deals "free trade" is especially inappropriate. The segment also wrongly asserted that the payroll tax is flat. This is not true. It is regressive, since the Social Security tax is capped. It does not apply to wage income above roughly $96,000. It also does not apply at all to capital income that disproportionately goes to higher income taxpayers.
--Dean Baker