Trump Floats Plan to Axe Income Tax Entirely
U.S. President Donald Trump said on Thursday that his administration is considering a sweeping tax overhaul that could reduce — and potentially eliminate — federal income taxes over the next several years, arguing that rising tariff revenues could replace a significant portion of government funding.
Speaking on a video call with U.S. military service members, Trump said his administration expects tariff income to increase to historic levels, making room for major tax cuts.
“Over the next couple of years, I think we’ll substantially be cutting, and maybe cutting out completely, income tax,” Trump said. “Could be almost completely cutting it because the money we’re taking in is going to be so large.”
The comments mark one of Trump’s most ambitious fiscal proposals since returning to office, drawing immediate attention from economists, tax-policy analysts, and lawmakers on both sides of the aisle.
A Tariff-Funded Government?
The President’s suggestion reflects a broader shift in his administration’s strategy. Since taking office, Trump has leaned heavily on tariffs — particularly on imports from China and other major trading partners — as a primary tool for revenue and leverage in economic negotiations.
Recent White House statements have emphasized that increased import duties are bringing in “record income” for the federal government, though independent analysts note that current tariff revenue remains far below the scale needed to replace income taxes.
In fiscal year 2025, tariff receipts were estimated at roughly $195 billion, compared to nearly $2.7 trillion collected through individual income taxes. For tariffs to fully replace that funding, revenue would need to expand more than tenfold — a scenario many experts view as mathematically unlikely without extremely high tariff rates.
Economists Sound the Alarm
Tax-policy experts say that while the federal government can supplement revenue with tariffs, replacing the entirety of income tax would require dramatic changes to trade flows, consumer prices, and import levels.
Higher tariffs — if set high enough to attempt replacing $2–3 trillion in annual tax income — would almost certainly increase prices for consumers, reduce imports, and potentially trigger retaliation from trading partners. Those consequences could, in turn, reduce overall tariff revenue rather than expand it.
Independent fact-checkers have also warned that the economic base for tariffs is too narrow to sustain the federal government alone. The United States imports roughly $3.5 trillion in goods annually; even a 100% across-the-board tariff would struggle to match the scale of the income-tax system once the resulting collapse in trade volumes is factored in.
Political and Legislative Hurdles
Beyond economic feasibility, eliminating income tax altogether would require Congressional approval, making the proposal far more complex than an executive action. Any change of that scale would involve rewriting major portions of the tax code, restructuring federal revenue systems, and negotiating how programs such as Social Security and Medicare would be funded.
So far, no formal legislation has been introduced that mirrors Trump’s proposal. Congressional leaders have not yet commented on whether such a plan would receive support.
Supporters Applaud, Critics Skeptical
Supporters of Trump’s idea argue that reducing or eliminating income tax would boost economic productivity and put more money directly into workers’ pockets. Some economic nationalists also view tariffs as a way to shift the tax burden toward foreign producers rather than American households.
Critics counter that tariffs ultimately behave like a consumption tax levied on Americans, not foreign companies, and that heavily expanding them could intensify inflation pressures.
A Vision or a Policy Path?
Trump’s comments signal a long-term vision rather than a finalized policy, but the administration has shown an increasing willingness to explore alternative revenue models anchored in tariff growth.
Whether the United States could realistically transition away from income tax — or whether Trump’s remarks represent an aspirational message rather than a concrete roadmap — remains uncertain.
For now, the proposal underscores a central theme of Trump’s economic agenda: reshaping America’s tax structure through aggressive trade policy and a belief that tariffs can become a dominant source of federal revenue.