Trump To Eliminate Income Tax?
This move has shocked America.
On Thursday, former President Donald Trump suggested a radical shift in the federal tax system by proposing the elimination of income taxes in favor of tariffs, according to a Republican legislator.
This idea was introduced during a lively and humor-filled session with Republican members of Congress on Capitol Hill, marking Trump’s first return since he left office in January 2021.
Representative Thomas Massie (R-Ky.) shared the news on X, stating, “The most interesting policy idea from this morning’s GOP meeting at the Capitol Hill Club: Trump briefly suggested replacing the income tax with tariffs.”
Trump’s campaign did not provide a comment to The Post regarding Massie’s statement.
Historically, before the 16th Amendment was ratified, tariffs were the primary revenue source for the federal government. The amendment, which was adopted in 1913, allowed Congress to impose taxes on personal income.
Many experts quickly pointed out the challenges and potential drawbacks of Trump’s proposal. They argue that tariffs alone would be insufficient to match the revenue generated by income taxes and could have adverse effects on exporters.
Erica York, a senior economist and research director at the nonpartisan Tax Foundation, highlighted the scale of the challenge in a post on X. “The individual income tax generates about $2 trillion annually from a personal income base of around $15 trillion,” she noted. “In contrast, customs duties currently raise approximately $80 billion from imports worth $3.4 trillion.”
York further explained, “It’s highly unlikely that $2 trillion in tax revenue could be extracted from $3 trillion in imports.”
Kyle Pomerleau, a senior fellow on tax policy at the American Enterprise Institute, echoed these concerns, stating that while import prices would rise, so would the value of the US dollar, potentially reducing sales and income for exporters.
Bryan Riley, director of the Free Trade Initiative at the National Taxpayers Union, provided a stark illustration of the challenge. Based on current import levels, he estimated that a 71 percent tariff rate would be necessary to match the revenue from income taxes. “However, such a high tariff rate would drastically reduce the volume of imports, making it unlikely to generate the needed $2.2 trillion.”
On the campaign trail, Trump has previously suggested imposing steep tariffs, such as a 60% or higher tariff on Chinese goods and a 10% across-the-board tariff on all imports.
