Trump Floats Stunning Plan to Replace Income Tax with Massive Tariff Revenue
President Donald Trump is proposing a sweeping transformation of how the federal government collects revenue—one that could ultimately end the federal income tax for American citizens.
The idea is to replace it with massive revenue generated from tariffs on foreign imports.
Trump told Fox News’ Rachel Campos-Duffy that tariff revenue could eventually fund the government, possibly ending direct taxes on Americans.
“There is a chance that the money from tariffs could be so great that it would replace [the income tax],” Trump stated, per Trending Politics.
The president explained that this method of revenue collection is not unprecedented. Prior to the ratification of the 16th Amendment in 1913, tariffs were the primary—if not only—source of federal income.
“That was when our nation was the richest,” Trump noted, referring to the years between 1870 and 1913 when no federal income tax existed and the U.S. relied entirely on import duties.
Trump’s comments come amid a larger shift in trade policy spearheaded by his administration. Beginning on what he dubbed “Liberation Day,” April 2, the White House began enforcing a new wave of tariffs targeting countries around the globe.
The goal, Trump says, is to pressure adversaries into trade realignments more favorable to the U.S.
Following these tariff hikes, Trump said that more than 70 countries have approached the U.S. about renegotiating terms.
While some of the initial tariffs have since been scaled back, Trump has kept heavy duties in place for Chinese imports, which currently face tariffs of up to 125 percent.
Certain exemptions are under consideration for specific consumer electronics and components tied to U.S. technological sectors such as artificial intelligence and supercomputing.
In retaliation, China has enacted counter-tariffs and introduced export restrictions on rare earth minerals, essential to the manufacturing of high-tech goods in the U.S.
The president’s suggestion of replacing the income tax comes as American taxpayers continue to shoulder the bulk of federal funding. According to 2021 figures from the Tax Foundation, the average federal income tax rate stood at 14.9 percent, per TP.
Nearly 46 percent of all income tax revenue came from the top 1 percent of earners, while the top 50 percent of earners generated nearly the entire pool of federal income tax dollars.
Campos-Duffy said Trump appeared enthusiastic about the idea during the interview.
“He’s seeing this as another form of revenue,” she noted. “In fact, he talked about just how much revenue was coming into the country… This is something I think he’s really committed to doing.”
“How amazing would that be?”
Trump has previously floated ideas to return savings from government reforms directly to Americans.
In an earlier proposal, he introduced the concept of “DOGE Dividends,” which would involve issuing checks to taxpayers from funds saved through spending cuts by the U.S. Department of Government Efficiency.
“Could be a lot. I mean, if it’s twenty percent, we could give back a lot of money to the taxpayer,” Trump said when asked how much those dividends could amount to.
He added that such a program could also motivate citizens to report inefficiencies within the federal government.
As his administration continues to reshape U.S. trade policy, Trump’s revenue vision places an increasing financial burden on foreign nations—while offering a potential tax reprieve to American households.
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