In recent campaign appearances, former President Donald Trump has put forward a bold idea: eliminating individual income taxes for Americans. This proposal builds on Trump’s earlier suggestions to remove taxes on car loan payments, Social Security benefits, and servers’ tips. However, erasing the income tax would be a significant departure from the current tax policy.
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When asked by podcast host Joe Rogan if he was serious about the plan, Trump responded, “Yeah, sure, why not?”
Trump suggested tariffs as a replacement for the lost tax revenue. “We will not allow the enemy to come in and take our jobs and take our factories and take our workers and take our families unless they pay a big price—and the big price is tariffs,” he said.
The individual income tax currently generates around half of the federal government’s annual $5 trillion revenue. However, it remains unclear whether Trump’s proposal would extend to payroll and corporate taxes, which contribute an additional 40% of federal tax revenue, according to the Tax Policy Center.
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“Even in its smallest form, it would be a pretty substantial change from current policy,” said Marc Goldwein, Senior Vice President and Senior Policy Director at the Committee for a Responsible Federal Budget. He noted, however, that the specifics of the plan remain vague. “We don’t have a full proposal,” Goldwein added.
“President Trump passed the largest tax CUTS for working families in history and will make them permanent when he is back in the White House in addition to ending taxes on tips for service workers and ending taxes on Social Security for our seniors,” said Karoline Leavitt, national press secretary for the Trump campaign.
Can Tariffs Fill the Revenue Gap?
Experts say that replacing the income tax with tariffs may be economically unfeasible. On the campaign trail, Trump has proposed tariff increases as high as 60% to 100% on Chinese goods and suggested a general tariff of between 10% and 20% on all imported goods. Earlier this month, he told an audience at the Economic Club of Chicago that this tariff could reach 50%.
Last year, the U.S. imported roughly $3.8 trillion worth of goods, according to the Bureau of Economic Analysis. To match the revenue currently generated by the income tax, the tariff rate would need to be about 70%, said Alan Auerbach, a tax policy professor at the University of California, Berkeley. However, a tariff of that scale could drastically reduce trade, cutting the amount of taxable imported goods and further reducing revenue.
“It wouldn’t be feasible,” Auerbach said.
Erica York, a senior economist at the Tax Foundation, agreed, stating that “it’s mathematically impossible.”
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Replacing income taxes with tariffs would also place a larger tax burden on low- and middle-income households, experts warned. In 2021, the top 50% of earners contributed nearly 98% of all federal income taxes, according to the Tax Foundation, while the bottom 50% contributed around 2%.
Higher tariffs generally increase consumer goods prices as foreign producers often pass the costs to customers. As a result, the financial strain would spread across all households, with lower-income earners likely to feel a heavier impact due to the larger proportion of their income spent on essentials.
“Tariffs are at best a flat tax and more likely a regressive one,” Goldwein said.
Congressional Hurdles
While Trump would have some authority in implementing tariffs, eliminating the individual income tax would require support from both chambers of Congress. Erica York emphasized that Trump “can’t just eliminate the individual income tax,” though he may attempt to negotiate further tax cuts in 2025, when many provisions of his signature tax reform law are set to expire.
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“Trump could possibly negotiate further tax cuts to be added to those,” York said. “But I don’t see a situation where Congress would align with this swap between the income tax and tariffs.”
