President Donald Trump has long praised tariffs as key to increasing wealth in the United States, idealizing Gilded Age policies that preceded the implementation of a modern federal income tax. Among the potential benefits, Trump claims, is the ability to replace revenue from federal income taxes with money the U.S.
Crystal Fabergé egg crafted for Russian royalty shatters record and sells for $30.2 millionTrump administration threatens to withhold SNAP management funds from states that don't share dataTV presenter Laura Woods collapses live on air during coverage of England soccer matchLauren Graham and Amy Sherman-Palladino to release 'Gilmore Girls' book in 2027AP Entertainment WireRaccoon goes on drunken rampage in Virginia liquor store and passes out on bathroom floorA vintage car graveyard in western Germany, in photosNew FDA-approved glasses can slow nearsightedness in kidsDo you eat a meal in 20 minutes or less? It might be time to slow downGen Z and millennials embrace sustainable alternatives to imported fresh flowersNew FDA-approved glasses can slow nearsightedness in kidsChairman of vaccine committee leaves for new HHS jobDenmark's government aims to ban access to social media for children under 15How Christian 'momfluencers' are reshaping the American rightRepublicano Matt Van Epps, apoyado por Trump, gana escaño de Tennessee en Cámara de RepresentantesEuropeans accuse Putin of feigning interest in peace after talks with US envoysThe Afternoon WireDoodling, drowsiness and a conspicuous misspelling highlight Trump's last Cabinet meeting of 2025Trump will play a starring role heading into a big weekend at the Kennedy CenterSpotify Wrapped 2025 is here and Bad Bunny has dethroned Taylor Swift as most-streamed artistRaccoon goes on drunken rampage in Virginia liquor store and passes out on bathroom floorA vintage car graveyard in western Germany, in photosNew FDA-approved glasses can slow nearsightedness in kidsDo you eat a meal in 20 minutes or less? It might be time to slow downGen Z and millennials embrace sustainable alternatives to imported fresh flowersNew FDA-approved glasses can slow nearsightedness in kidsChairman of vaccine committee leaves for new HHS jobDenmark's government aims to ban access to social media for children under 15How Christian 'momfluencers' are reshaping the American rightRepublicano Matt Van Epps, apoyado por Trump, gana escaño de Tennessee en Cámara de RepresentantesPresident Donald Trump listens during a Cabinet meeting at the White House, Tuesday, Dec.
2, 2025, in Washington. Among the potential benefits, Trump claims, is the ability to replace revenue from federal income taxes with money the U.S. is taking in from tariffs — a concept he has touted since his 2024 presidential campaign, most recently at a Cabinet meeting Tuesday. But tariff revenue doesn’t even come close to where it would need to be if federal income taxes were eliminated, and experts say such a plan isn’t at all feasible.CLAIM: The U.S. is earning enough revenue from tariffs to eventually eliminate federal income taxes. THE FACTS: This is false. Individual income taxes brought in trillions more dollars than tariffs did in the last fiscal year, accounting for more than 50% of total U.S. revenue, according toof the current fiscal year, which began Oct. 1, individual income taxes accounted for 54% of total revenue. Tariffs made up 7.75%. Trump’s proposal wouldn’t work regardless, according to experts, given the unreliability of tariff revenue as well as the harmful effects of tariffs on economic growth and their outsize impact on lower earners. “It’s not possible. It’s not feasible mathematically or economically,” said Brandon DeBot, senior attorney adviser and policy director at New York University’s Tax Law Center. “And analysts from a range of different perspectives agree with that conclusion. Even the very substantial tariffs imposed this year, which are at the highest levels in the postwar era, raise nowhere near the revenue that income tax does.” Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy, called the idea “nonsensical.”“And I believe that at some point in the not too distant future, you won’t even have income tax to pay. Because the money we’re taking in is so great, it’s so enormous, that you’re not going to have income tax to pay,” he said at the meeting, which lasted, Treasury Department data shows that revenue from individual income taxes was approximately $2.66 trillion out of about $5.23 trillion in total revenue. Corporation income taxes added approximately $452 billion. Customs duties earned nearly $195 billion. That’s a difference of around $2.8 trillion.is shaping up in a similar fashion. Individual income taxes took in about $217 billion out of approximately $404 billion in total revenue the first month, with about $15 billion in additional funds from corporation taxes. Tariffs, meanwhile, earned around $31 billion.by other countries and international companies. But the precise terms of these investments have yet to be fully codified and released to the public, and some numbers are under dispute or involve potentially fuzzy math. The modern federal income tax was created with the ratification of 16th Amendment in 1913, ending the 43-year era when Trump says the country was wealthiest. He has not expressly detailed plans to end a national income tax since retaking the White House, and he can’t do so without an act of Congress and upending the federal budget. “President Trump is set to raise trillions in revenue for the federal government in the coming years with his tariffs — whose costs will ultimately be paid by the foreign exporters who rely on the American economy, the world’s biggest and best consumer market,” said White House spokesman Kush Desai. He also cited “trillions in historic investment commitments to make and hire in America” that have been fueled by tariffs.. Those companies typically pass their higher costs on to their customers in the form of higher prices. Still, tariffs can hurt foreign countries by making their products pricier and harder to sell abroad. Foreign companies might have to cut prices — and sacrifice profits — to offset the tariffs and try to maintain their market share in the United States.Even if the numbers were made to add up, replacing revenue from federal income taxes with that of tariffs — a Republican talking point since the 1990s — poses many risks. Tariffs, especially at rates needed to make up for a loss in federal income taxes, could lead to retaliation from other countries and a lack of imports. In fact, revenue could start going down the more tariffs go up. There is also a lot of uncertainty about how much revenue tariffs will actually take in, given periodic changes to Trump’s policies. “We would be talking about living in a completely different world than the one we live in now,” said Wamhoff. “There was a time when the government’s finances were provided through tariffs. But I believe people were getting around with a horse and buggy back then and not cars. I mean, that was a completely different time.” Another reality is currently playing out. Trump’s tariffs are the subject of a Supreme Court case and could beif the justices decide he does not have the authority to implement them. However, the president will still have plenty of options to keep taxing imports aggressively even if the courts rule against him. For example, he can reuse tariff powers he deployed in his first term and can reach for others, including one that dates back to the Great Depression. Many companies — including Costco — aren’t waiting for a decision from the Supreme Court. Instead, they’re filing suits against the Trump administration Experts say there is also an issue of fairness, noting that tariffs would shift the tax burden to lower-income households given their propensity to increase costs on consumer goods. Plus, they lack the flexibility of income taxes, which can be set at any desired rate, and they wouldn’t allow for incentives such as charitable donations or child tax credits. “Inequality is very highly skewed toward the top,” said Michael Graetz, a professor of tax law at Yale University. “We’ve got more billionaires than we’ve ever had. We’ve got more millionaires than we’ve ever had. So it’s a strange time to be reducing the tax burden on the top and increasing it on the middle. It’s a proposal that is very effective for fundraising for Republicans and it always has been.”
International Trade Taxes Government Policy General News Tariffs And Global Trade Steve Wamhoff Business Washington News World News United States Politics Costco Wholesale Corp. Washington News World News
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Costco seeks 'full refund' for tariffs in new lawsuit against Trump administrationPresident Donald Trump imposed a flurry of tariffs earlier this year.
Read more »
Watch Live: President Donald Trump to make announcement from White HousePresident Donald Trump is set to make an announcement Tuesday afternoon, according to a daily memo from The White House. The announcement is set to begin at 1…
Read more »
Trump says he's rebuilding Dulles airport while his administration is fixing the 'people movers'President Donald Trump has announced plans to reconstruct Dulles International Airport in northern Virginia.
Read more »
Trump says he's rebuilding Dulles airport while his administration is fixing the 'people movers'President Donald Trump has announced plans to reconstruct Dulles International Airport in northern Virginia.
Read more »
Minnesota Somali Immigrants Targeted in Planned Immigration OperationThe move comes as President Donald Trump has escalated his rhetoric about Minnesota’s Somali community.
Read more »
What Happened to President Donald Trump's Hand?Is he okay?
Read more »