Trump suggests tariffs could replace income taxes
The plan could save the average American hundreds of thousands in tax payments, but analysts remain sceptical of its effectiveness.
US President Donald Trump has proposed substantial reductions or even the elimination of federal income taxes once the full impact of import tariffs is realised. In a 27 April post on Truth Social, Trump revealed that the plan would primarily benefit individuals earning less than $200,000 annually.
He added that the government might transition to funding its operations through import tariffs rather than the traditional model, which relies on the Internal Revenue Service (IRS).
Trump’s vision involves creating what he described as an ‘External Revenue Service,’ where revenues would come solely from tariffs. He has suggested that this change could trigger economic benefits similar to those seen in the US during the 19th century, when there was no permanent federal income tax.
Research by Dancing Numbers indicates that such a plan could potentially save the average American significant amounts in lifetime tax payments.
However, the proposal has raised concerns among analysts and financial markets. Despite Trump’s past remarks, doubts exist about how practical this plan could be. His administration has faced criticism for its unpredictable trade policies, which have caused volatility in the stock market and increased bond yields.
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