Trump Proposes Bold Tax Plan: Tariffs Could Replace Income Taxes for Millions of Americans
Former President Donald Trump is rekindling the debate over federal tax reform with a bold pledge: using tariffs as a major source of revenue to replace income taxes for the vast majority of Americans. In a series of recent statements on the Truth Social social network and at rallies, Trump said the policy would not only significantly reduce income taxes but *“completely eliminate”* them for middle- and low-income earners.
“We are taking in hundreds of millions of dollars a day from tariffs. As they continue to rise, income taxes for millions of Americans will be drastically reduced — or even eliminated. My target is people making under $200,000 a year,” Trump declared.
Tariffs as a Sustainable Revenue Source
According to current figures, the U.S. government collects about $215 million a day from tariffs — more than $78 billion a year. However, with increased tariffs on imports from countries like China and Mexico, the projected revenue could reach $166.6 billion by 2025.
In his speech, Trump emphasized:
“We were a great, wealthy country in the late 19th century, with no income tax. That’s the model I want to bring back to America.”
“Outside IRS”: Tax Cuts – Job Creation
Trump also announced an initiative informally called the “Outside IRS,” which aims to gradually replace the traditional role of the Internal Revenue Service (IRS) with a system based on tariffs and indirect taxes.
“This will be a gift to America,” he wrote. “We’re seeing factories and manufacturing come back — and that means jobs, prosperity, and a lower tax burden.”
In line with Trump’s plan, Commerce Secretary Howard Lutnick confirmed his goal of eliminating federal income tax for individuals making less than $150,000 a year. He also unveiled parallel plans to eliminate taxes on tips, overtime earnings, and Social Security benefits.
“This is more than just a tax policy — this is a strategy to restore financial freedom to working Americans,” Lutnick told CBS News.
A groundbreaking campaign
With this proposal, Mr. Trump is charting a path for radical economic reform in the 2024 race for the White House. While his plan is controversial among academics and financial experts, it has attracted strong attention from middle-class voters and workers — who have felt the burden of increasing taxes in recent years.
The question now is whether Congress and the federal tax system are ready for a historic shift, replacing the income tax with tariffs — or is this just another powerful campaign slogan from the ever-controversial former president?