President Donald Trump has suggested that imposing tariffs on foreign nations, a key part of his administration’s agenda, will bring back wealth to Americans, not income taxes.
“America is going to be very rich again, and it’s going to happen very quickly,” he said during a speech at the 2025 Republican Issues Conference at the Trump National Doral Miami in Florida on Monday.
“It’s time for the United States to return to the system that made us richer and more powerful than ever before. […] Instead of taxing our citizens to enrich foreign nations, we should be tariffing and taxing foreign nations to enrich our citizens,” he added.
Newsweek contacted Trump’s team for comment by email on Tuesday morning.
Why It Matters
Last year, CNBC reported that during a private meeting in the midst of his presidential campaign, Trump floated the idea that, if elected, he might eliminate the federal income tax by creating an “all tariff policy.”
Trump later publicly confirmed his intention of eliminating the tax, “if what I’m planning comes out,” he told barbers in the Bronx, New York, back in October.
Several experts spoke against the idea back then, expressing concerns over the way it would impact the federal government’s revenues.
Among them was David Kamin, a professor at New York University School of Law, who wrote on X that “broadly substituting tariffs for income tax is a sure way to hit hard low- and middle-income Americans and reward top.”
What to Know
On Monday, Trump mentioned, with a certain nostalgia, a past where the U.S. had many more tariffs on goods coming from foreign nations and did not have an income tax.
“You know, the United States in 1870 to 1913—all tariffs. And that was the richest period in the history of the United States, relatively speaking,” Trump said.
“They set up the great Tariff Commission of 1887, and this commission had one function: what to do with all the money that we took in,” he claimed.
“Teddy Roosevelt was the beneficiary, […] he was given a vast amount of money and that was all made through tariffs, we had no income tax, the income tax came in in 1913.”
What we don’t know, as of yet, is whether Trump plans to eliminate the federal corporate income and payroll taxes or just the individual income tax. The latter raises about half of the nearly $5 trillion in revenue that the federal government collects every year, CNN reported.
At the moment, only 2 percent of federal revenues comes from tariffs—though this number might inflate if Trump imposes new tariffs on countries like Canada, China, and Mexico, as promised.
How Do Americans Feel About The Income Tax?
While Trump supporters at the Monday event and on social media seem widely supportive of the president’s idea to eliminate the federal income tax, a recent survey by Gallup found that a majority of Americans does not consider federal taxes as one of the major problems facing the country.
Just four percent of Americans asked by Gallup to name the most important financial problem facing their family last year mentioned taxes.
A Pew Research poll from 2023 found that only 38 percent of respondents said what they pay in federal taxes bothers them a lot—less than the share of Americans bothered by wealthy people not paying their fair share of taxes.
However, a majority of 56 percent of Americans told Gallup in April that their federal taxes were “too high.” Despite the significance of this number, the share of Americans thinking their federal taxes were too high last year was down from 60 percent the year before.
What People Are Saying
Assaf Harpaz, an assistant professor at the University of Georgia School of Law, previously told Newsweek: “The [“all tariff policy”] policy, if implemented, is unlikely to benefit most Americans. The federal income tax is progressive by design, whereas an all-out tariff could create regressive outcomes—burdening lower and middle-income Americans while favoring higher-income individuals and corporations.”
Rick Miller, a financial planner and investment advisor at Miller Investment Management, told Yahoo! Finance that, without income tax, some employers could introduce other forms of compensations for employees instead of raising salaries: “Employers would have maximum flexibility and creativity in the entire compensation arena. Job seekers could benefit from creative compensation plans and more freedom to negotiate an attractive job offer on both sides.”
However, he added: “A consumption tax alternative would have to be structured in a way that does not penalize lower wage earners if income taxes do not exist. Even without an income tax, lower wage employees still have a harder time managing their limited cash flow, and this would need to be factored in.”
What’s Next
Should Trump introduce an “all tariff policy,” as previously suggested, the expected increase in the cost of foreign-made goods will eventually be passed on to customers. According to experts, low- and middle-income Americans will be hit the hardest from the replacement of the federal income tax from what would effectively be a consumption tax.
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