Former President Donald Trump on Thursday floated the idea of repealing the income tax and replacing it with tariffs as the government’s main source of revenue, according to Republican lawmakers.
The proposal was made as Trump, 77, the presumptive Republican presidential nominee, held a jokey “pep talk” with Republican lawmakers on Capitol Hill for his first time since leaving office in January 2021.
“The most interesting policy idea coming out of this morning’s Republican meeting at the Capitol Hill Club,” Rep. Thomas Massie (R-Ky.) wrote to X. “Trump briefly floated the idea of repealing the income tax and replacing it with a tariff.”
The Trump campaign did not respond to The Washington Post’s request for comment on Massie’s allegations.
Prior to ratification of the 16th Amendment to the Constitution, which gave Congress the power to impose income taxes, tariffs were the federal government’s primary source of revenue.
Experts say Trump’s plan would not raise as much revenue as an income tax and could hurt exporters.
“The personal income tax would amount to a roughly $2 trillion annual tax increase on a roughly $15 trillion personal income tax base,” Erica York, senior economist and research director at the nonpartisan Tax Foundation, wrote on X. “The tariffs currently amount to a roughly $80 billion annual tax increase on $3.4 trillion in imports.”
“[G]It’s going to be hard to squeeze $2 trillion in tax revenue out of $3 trillion in imports,” she added in another post.
“Import prices will rise, [US dollar]”The result will be lower sales and revenues for exporters,” Kyle Pomerleau, senior fellow for tax policy at the conservative American Enterprise Institute, argued on X.
Brian Reilly, director of free trade initiatives at the National Taxpayers Union, noted that based on current U.S. import levels, “a tariff of 71 percent would be needed” to generate the same level of revenue that an income tax would.
“But with a 71% tariff, import volumes will fall dramatically.” He argued“As a result, the revenue generated will be nowhere near $2.2 trillion.”
During the election campaign, Trump Over 60% A 10% tariff would be imposed on all Chinese products, and a flat 10% tariff would be imposed on all imports.
