President Trump’s plan to replace income tax with tariff revenue is ‘absolutely’ a possibility according to National Economic Council Director
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LurchAddams
There Can be Only One!
So, the reason this is so stupid? Tariffs are a tax on imported goods, a tax countries exporting goods to us will mark up their products to maintain their profit. Tariffs DO NO GENERATE REVENUE!
trumptards are such fucking idiots!
trumptards are such fucking idiots!
BartenderElite
Verified User
LOL
So, this is what the end looks like.
So, this is what the end looks like.
If prices go up US companies will be more competitive and China will reduce prices or lose market share. If China does not reduce prices American manufactures will fill the void.
Yes it did.
LurchAddams
There Can be Only One!
First of all - that's NOT what trump is claiming - he's claiming tariffs generate revenue which is idiotic. Second of all, as what happened with trump's tariffs on soybeans - what will happen is that exporters will not lower their prices - they'll simply sell to someone else.
volsrock1
Verified User
AI Overview
Tariffs are taxes on imported goods and services, and they have historically been a source of government revenue.
BartenderElite
Verified User
AI?
volsrock1
Verified User
A tariff is a tax levied on imported goods and services. Historically, tariffs were a major source of revenue for many countries and were often the primary source of federal revenue through the late-nineteenth century
you are an idiot
LurchAddams
There Can be Only One!
So - when the countries trump is imposing tariffs on retaliate and charge American companies the same proportion of tariffs the US is imposing on them? All that "revenue" we made on the tariffs is immediately offset - or worse - like what happened with soybean tariffs in trump's first term - nations will find other suppliers.
LurchAddams
There Can be Only One!
See my previous post to you.
Ah, Kevin Hassett was appointed by Trump, did you expect he was going to speak the truth? Like asking Hannity or Tucker what they think
NEXT
Diogenes
Nemo me impune lacessit
Diogenes
Nemo me impune lacessit
Replacing federal income tax with tariffs is an intriguing idea that’s been floated before, rooted in how the U.S. funded itself pre-1913 when the income tax became permanent via the 16th Amendment.
Historically, tariffs were the backbone of federal revenue—think 19th-century levels where they often covered 50% or more of the government’s budget. So, in theory, it’s not impossible. But let’s break it down practically for 2025.
Federal income tax currently pulls in about $2.2 trillion annually (based on recent IRS data), roughly half the federal budget.
Tariffs, by contrast, brought in $80 billion in 2023—not even close. To fully replace income tax, you’d need to jack up tariffs to generate 25-30 times that amount. That means massive taxes on every imported good—think 50-100% or higher on everything from iPhones to oil. Global trade would take a hit, prices would skyrocket, and industries reliant on imports (auto, tech, energy) would scream. Economic models—like those from the Tax Foundation—suggest this could shrink GDP by 5-10% due to trade disruptions and higher costs.
On the flip side, proponents argue it simplifies taxation—no more IRS filings—and shifts the burden to consumption, hitting foreign producers more than domestic workers.
A 2019 study by the National Bureau of Economic Research estimated a revenue-neutral tariff rate of around 30% could theoretically work if paired with cuts to federal spending (which is $6-7 trillion now). But that assumes Congress could stomach slashing entitlements and defense.
Realistically, tariffs could supplement income tax, maybe offsetting 10-20% of it with a broad 15-20% rate.
@Grok
Historically, tariffs were the backbone of federal revenue—think 19th-century levels where they often covered 50% or more of the government’s budget. So, in theory, it’s not impossible. But let’s break it down practically for 2025.
Federal income tax currently pulls in about $2.2 trillion annually (based on recent IRS data), roughly half the federal budget.
Tariffs, by contrast, brought in $80 billion in 2023—not even close. To fully replace income tax, you’d need to jack up tariffs to generate 25-30 times that amount. That means massive taxes on every imported good—think 50-100% or higher on everything from iPhones to oil. Global trade would take a hit, prices would skyrocket, and industries reliant on imports (auto, tech, energy) would scream. Economic models—like those from the Tax Foundation—suggest this could shrink GDP by 5-10% due to trade disruptions and higher costs.
On the flip side, proponents argue it simplifies taxation—no more IRS filings—and shifts the burden to consumption, hitting foreign producers more than domestic workers.
A 2019 study by the National Bureau of Economic Research estimated a revenue-neutral tariff rate of around 30% could theoretically work if paired with cuts to federal spending (which is $6-7 trillion now). But that assumes Congress could stomach slashing entitlements and defense.
Realistically, tariffs could supplement income tax, maybe offsetting 10-20% of it with a broad 15-20% rate.
@Grok
Diogenes
Nemo me impune lacessit
The government was smaller then.
Before the federal income tax became permanent in 1913 with the 16th Amendment, tariffs were the U.S. government’s primary revenue engine, alongside excise taxes. From the founding through the 19th century, they funded most federal operations—often 50-90% of the budget, depending on the era.
Let’s unpack how this worked.
Tariffs were customs duties slapped on imported goods—think cotton from Britain, sugar from the Caribbean, or manufactured goods from Europe.
Rates varied wildly over time. The Tariff of 1789 started modest at 5-15%, but by the 1820s and 1830s, rates spiked to 40-50% on some items to protect American industries like textiles and iron. Congress set these rates through legislation, often after heated debates pitting the industrial North (pro-tariff) against the slave-owning South (anti-tariff).
In 1860, tariffs brought in about $53 million—90% of federal income—when the budget was tiny (under $60 million).
Post-Civil War, with spending ballooning to pay debts, tariffs still covered 50-60% of revenue, peaking at $405 million by 1900.
Rates averaged 20-30% under acts like the McKinley Tariff (1890). The system leaned on trade volume: more imports, more cash. Ports like New York and Boston were goldmines, with customs houses collecting duties directly.
It wasn’t perfect. Revenue swung with economic conditions—booms meant more imports and cash; recessions like the Panic of 1873 tanked collections.
No income tax meant no direct way to tax wealth or wages, so the system favored merchants and consumers paying at the border over, say, land-rich farmers.
Excises on booze and tobacco filled gaps (10-20% of revenue), but tariffs were king. High rates also sparked smuggling—think rum runners—and trade wars, like when Britain retaliated in the 1830s.
Northern manufacturers loved protectionism; Southern exporters hated it, arguing it jacked up costs for goods they bought.
Nullification crises (1832) nearly broke the Union over this. Still, it kept the government lean—pre-1900 budgets rarely topped 2-3% of GDP, versus 20%+ today. No sprawling welfare state or military-industrial complex back then.
Could it work now? Pre-1913, it funded a minimalist government in a less globalized world.
Scaling that to 2025’s $6 trillion budget would mean tariffs orders of magnitude higher, disrupting a way more interconnected economy. Back then, it was simpler: tax the ships, fund the basics, argue over the rest.
@Grok
Current US spending is $6.9 Trillion per year. The budget proposal just passed by GOP Congress will increase that spending by adding money for the military and DHS.
Trump's spokesman said tariffs will bring in about 500 billion to $1 trillion over the next 5 years. That would be about $200 billion per year. How are tariffs going to replace the income tax without creating huge deficits?
Althea
Althea told me...........
That's not how tariffs work. Simpleton. If China reduces prices, then American companies suffer even more.
Diogenes
Nemo me impune lacessit
Althea
Althea told me...........
trump is too stupid to understand complex issues. He, along with the other oligarchs just want to keep all of their money and pay no taxes.
It's no secret that the middle class consumes much more than the upper class. Once again, the middle class pays all of the taxes.