By TrumpG 
Former President Donald Trump has proposed a new economic idea: replacing income tax with tariffs. In an interview with Joe Rogan, Trump reiterated his plan to eliminate income tax and replace it with tariffs. Rogan asked if Trump was serious about this idea, to which Trump responded affirmatively, stating that high tariffs would prevent foreign entities from taking American jobs and factories without paying a high price.
Trump’s economic plan includes a comprehensive tax overhaul, aiming to erode the income tax system and replace it with strict tariff policies. He proposed eliminating income taxes on tips, overtime, and social security benefits, alongside renewing his 2017 tax cuts set to expire in 2025. According to the nonpartisan Tax Foundation, eliminating income taxes on tips, overtime, and social security alone would cost around $2 trillion over ten years. This cost would increase with Trump’s additional tax relief proposals.
Trump envisions aggressive tariff policies to offset these costs, suggesting a 20% tariff on all imports, with higher rates for Chinese imports. However, tax experts and economists doubt that Trump’s tariffs would compensate for the trillions lost from eliminating income tax. Garrett Watson, a senior policy analyst at the Tax Foundation, stated that it would be impossible to raise tariff rates high enough to cover the lost income tax revenue, as imports would decrease with higher tariffs. Watson estimated that Trump’s tariffs would generate about $3.8 trillion over ten years, compared to the $33 trillion that personal income tax would bring in the same period.
Overall, Trump’s tax plan, including tariffs, would increase the deficit by $3 trillion over a decade. Additionally, American importers would bear the cost of Trump’s tariffs, raising production costs and potentially leading to higher consumer prices, just as inflation begins to cool. These tariffs could effectively replace income tax with a new sales tax, shifting more of the tax burden onto low-income individuals.
Vice President Kamala Harris has adopted economists’ analysis of Trump’s tariffs as a campaign talking point, stating that it would be a sales tax on the American people.
