Former President Donald Trump expressed his support for abolishing income taxes and replacing them with revenue generated from tariffs. This proposal was discussed during a three-hour episode of the Joe Rogan Experience on Friday night. As the leading Republican candidate, Trump criticized companies relocating production from the U.S. to other nations, threatening substantial tariffs on them.
Trump stated his belief that tariffs could significantly enrich the U.S., describing the term "tariff" as being more appealing than the word "love." When Joe Rogan questioned whether Trump was seriously considering replacing income taxes with tariffs, Trump affirmed the idea, responding, "Yeah, sure, but why not?"
He highlighted his admiration for William McKinley, who served as president from 1897 until his assassination in 1901, labeling him the "tariff king." Trump emphasized the need for tariffs to prevent countries from exploiting U.S. jobs, factories, and workers, insisting that foreign entities should face significant costs for such actions.
Previously, Trump hinted at eliminating income taxes, suggesting in June that tariff revenue could replace federal income tax revenue. At a Bronx barbershop event aired on Fox News, Trump reiterated this concept, praising late 19th-century policies that relied entirely on tariffs without income tax. He criticized the impact of current income taxes on individuals who struggle to pay them.
Trump has also suggested extending tax cuts initiated during his presidency and eliminating various taxes, such as those on tips, overtime pay, and Social Security payments. He proposed exemptions for the military, veterans, and first responders.
These proposals have raised concerns among budget analysts, who caution about the impact on the expanding federal deficit. Although the deficit is expected to grow under either Trump or Kamala Harris, the Penn Wharton Budget Model and the Committee for a Responsible Federal Budget have indicated that Trump’s policies could significantly increase the deficit.
As Wall Street anticipates a potential Trump victory in November, U.S. bond yields have risen in response to expectations that the Treasury Department might increase auctions to finance the growing deficits and debt interest payments. Meanwhile, many economists have rejected the feasibility of tariff revenue replacing income tax revenue. Garrett Watson, a senior policy analyst at the Tax Foundation, estimated that Trump’s tariffs would generate approximately $3.8 trillion over ten years, far less than the $33 trillion produced by individual income taxes.
Economists have further stated that Trump’s plan for widespread tariffs, including significant increases on countries like China, would likely result in higher prices for American consumers and could fuel inflation. Additionally, retaliatory tariffs from other countries could adversely affect U.S. exporters, while a reduction in costlier imports could diminish the revenue generated from Trump’s proposed tariffs.
