If President Donald Trump has his way, tariffs on adversarial countries may eventually replace the U.S. income tax, he suggested on Monday.
In an interview with Fox News correspondent Rachel Campos-Duffy, the Republican revealed that, depending on how his current tariffs perform in rebalancing the global trade back in America’s favor, he may find it advantageous to collect revenue through external sources rather than from American citizens.
“There is a chance that the money from tariffs could be so great that it would replace [the income tax],” Trump said.
Between 1870 and 1913, tariffs on other nations’ imports were the only form of revenue collected by the U.S. government, Trump explained. It wasn’t until 1913 and the ratification of the 16th Amendment that a permanent income tax was introduced; at the time, less than 1% of Americans had to pay it, according to Investopedia.
But it was during those early years “when our nation was the richest,” the president added.
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Campos-Duffy later recalled that Trump “loved the question,” indicating the appeal he may see in possibly shifting nearly half of the government’s revenue from Americans onto the backs of other countries.
“He’s seeing this as another form of revenue. 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,” she said. “How amazing would that be?”
The average federal income tax rate was 14.9% in 2021, the latest year in which data is available, according to the Tax Foundation. The top 1% of earners pay nearly 46% of all federal incomes taxes while the top 50% of earners account for nearly all of the revenue brought in by the government.
A whiplash of tariff adjustments has been the modus operandi of the Trump administration since “Liberation Day” on April 2nd, the start of historically high tariffs on countries around the globe. President Trump later rescinded many of those astronomical figures after claiming that upwards of 70 countries have approached the U.S. about “making a deal” to renegotiate their own tariffs on U.S. goods.
In its wake, the big loser has been China where nearly all goods remain under 125% in total tariffs, though Trump has stated he plans to exempt certain consumer electronics and critical parts for U.S. supercomputing and artificial intelligence capabilities. The country’s communist government has responded by imposing equal tariffs on its imports from the U.S. and establishing restrictions on its critical rare earth mineral exports.
It’s not the first time that President Trump has proposed putting money back in the pockets of Americans as a result of his administration’s priorities. Cost-cutting by the U.S. Department of Government Efficiency may eventually support “DOGE Dividends” in the form of direct checks, Trump previously said.
“Could be a lot. I mean, if it’s twenty percent, we could give back a lot of money to the taxpayer,” he replied when asked how much it could mean for the average American family, adding a DOGE dividend would “give an incentive for the taxpayer to go out and report things to use where we can save money.”
