Trump floats replacing income tax with tariffs: GOP lawmaker
Former President Donald Trump on Thursday raised the idea of abolishing income taxes and replacing the primary government revenue source with tariffs, according to a Republican lawmaker.
The proposal was brought up by the 77-year-old presumptive GOP nominee for president during a joke-filled “pep talk” with congressional Republicans on Capitol Hill, his first since leaving office in January 2021.
“Most intriguing policy idea from the GOP meeting at the Capitol Hill Club this morning,” Rep. Thomas Massie (R-Ky.) wrote on X. “Trump briefly floated the concept of eliminating the income tax and replacing it with tariffs.”
The Trump campaign did not respond to The Post’s request for comment on Massie’s claim.
Tariffs were the main source of the federal government’s revenue prior to the ratification of the 16th Amendment, which gave Congress the power to levy taxes on income.
Experts argue that Trump’s idea would not be able to generate the amount of revenue that income taxes bring in and that it could hurt exporters.
“The individual income tax raises about $2 trillion annually on a tax base of personal income of roughly $15 trillion,” Erica York, senior economist and research director at the nonpartisan Tax Foundation, wrote on X. “Customs duties currently raise about $80 billion annually on imports of $3.4 trillion.”
“[G]ood luck milking $2 trillion of tax revenue out of $3 trillion of imports,” she added in a separate post.
“The price of imports would rise, but so would the [US dollar], leading to lower sales and income for exporters,” Kyle Pomerleau, a senior fellow on tax policy at the conservative American Enterprise Institute, argued on X.
Bryan Riley, director of the Free Trade Initiative at the National Taxpayers Union, notes that based on the current level of US imports, “it would take a tariff rate of 71 percent” to generate the same level of revenue that income taxes bring in.
“However, a tariff rate of 71 percent would dramatically reduce the volume of imports,” he argued. “As a result, the revenue generated would be nowhere close to $2.2 trillion.”
On the campaign trail, Trump has floated tariffs of 60% or higher on all Chinese goods and a 10% across-the-board tariffs on all imported goods.
