CNN —
After promising to eliminate taxes on tips, Social Security benefits and overtime pay, former President Donald Trump is taking aim at the federal income tax, the heaviest of them all.
With Election Day just around the corner, President Trump spoke in two high-profile interviews this week about his interest in repealing the federal income tax, recalling the late 19th century when the United States relied on tariffs to fund federal spending. The former president vowed to impose widespread tariffs, arguing they could generate trillions of dollars in revenue.
In a segment aired on Fox News on Monday, President Trump spoke to a barber in the Bronx, New York, and said, “If what I’m planning to do happens, there’s a way.”
“In the 1890s, when we were a smart country…this was the richest time this country had ever been. Everything was taxed. There was no income tax.”Barbers Can Waive Federal Income Tax After being asked if that was the case, President Trump said: “Right now we have income taxes and we have people dying. They’re paying taxes and they don’t have the money to pay them.”
A few days later, podcaster Joe Rogan asked President Trump if he was serious about replacing the federal income tax with tariffs.
“Yeah, sure, why not?” President Trump said in an interview on “The Joe Rogan Experience” on Friday.
President Trump also floated the idea of eliminating the federal income tax in June, but asked whether he would eliminate the federal corporate income tax and payroll tax, or the individual tax, which collects about half of the federal government’s roughly $5 trillion in revenue. It has not been stated whether only the income tax will be abolished. The government collects the tax.
In contrast, tariffs bring in about 2% of federal revenue.
Trump campaign senior adviser Jason Miller told reporters on Saturday that eliminating the income tax could be an “aspirational goal” in the future, adding that the former president’s top priorities include the 2017 tax cuts and jobs package. He pointed to extending the law’s expiring provisions and implementing targeted tax cuts. What Trump has developed.
If President Trump is elected, sweeping tariffs will be a cornerstone of his economic platform for his second term. He called for a flat tariff of 10% or 20% on all imports into the United States, and a 60% or higher tariff on all Chinese imports.
The former president argues that the smaller tariffs he imposed during his first term will compensate for his series of expensive proposals. He has repeatedly denied that U.S. consumers bear the brunt of the tariffs and has inaccurately claimed that foreign countries pay them.
But many federal budget experts are pouring cold water on the idea that tariffs could replace income taxes.
“This is an absurd idea for a number of reasons, the biggest being that it is mathematically impossible to replace income taxes with tariffs,” Erica York, senior economist and research director at the right-wing Tax Foundation, told CNN. That’s what I mean.” “The tax base on imported goods is much smaller than taxable income, and there is no way to squeeze enough revenue out of taxing imports to completely replace taxable income. would increase taxes on U.S. exports and lead to harmful retaliation against U.S. exports.
Brian Riedl, a senior fellow at the right-wing Manhattan Institute, told CNN that higher tariffs would likely force Americans to buy fewer imported goods, wiping out at least some of the expected revenue.
“At first glance, a 75% tariff on $3.2 trillion of annual U.S. imports would be required to fully replace the $2.4 trillion income tax,” he said. “But even that is an unrealistic assumption that Americans will continue to buy the same imports at nearly twice the price.”
What’s more, Riedl said, President Trump had to use some of the revenue from tariffs imposed during his first term to help industries like agriculture hurt by other countries’ retaliation.
“So even the new revenue from President Trump’s upcoming tariffs may not result in much net budget savings,” he continued.
Even without eliminating the federal income tax, President Trump’s economic package would add $7.5 trillion to the national debt over 10 years, according to a recent analysis by the Committee for a Responsible Federal Budget. A nonpartisan watchdog group estimates his tariff proposal would generate $2.7 trillion in revenue over 10 years.
