Trump Announces Idea To Eliminate Income Tax And Replace It With Tariffs

Former President Donald Trump has proposed an “all tariff policy” that would eliminate income tax if implemented, as reported by CNBC.

Republican lawmakers have shown support for this idea, with some suggesting that lowering income tax could be offset by tariffs, particularly on adversarial nations.

Trump’s proposal includes exempting tips from taxation for service industry workers, a move aimed at benefiting lower-income workers.

“He does want to look at lowering the income tax, and that could be offset and paid for by some type of tariffs, particularly on adversarial nations,” Rep. Nicole Malliotakis said.

“President Trump says ‘this is an idea, but I’d love to raise tariffs’ and then he said, ‘and maybe even no income taxes on Americans.’ Everyone was clapping in the room,” Rep. Marjorie Taylor Greene said. “I think that’s a fantastic idea.”

“Republicans who are free trade realize there has to be a balance,” Rep. Jodey Arrington said. “Trump’s message on tariffs has been embraced.”

Critics argued that replacing income tax with tariffs could lead to significant price hikes, disproportionately affecting the middle and lower classes and potentially sparking economic warfare.

The debate around this proposal highlights differing perspectives on its potential impact on different segments of the population.

“For those hotel workers and people that get tips, you’re going to be very happy. Because when I get to office, we are going to not charge taxes on tips,” Trump said.

“We’re not going to do it, and we’re going to do that right away, first thing in office, because it’s been a point of contention for years and years and years. And you do a great job of service, you take care of people and I think it’s going to be something that really is deserved,” he said.

“If there was something we could do to really energize that particular segment of the population, that might be a real popular thing to do,” Sen. Mike Rounds said.

“Most intriguing policy idea from the GOP meeting at the Capitol Hill Club this morning: Trump briefly floated the concept of eliminating the income tax and replacing it with tariffs,” Rep. Thomas Massie said.

While some Republicans see this as an energizing policy idea, Democrats have raised concerns about the potential consequences of such a plan.

“Trump floated eliminating the federal income tax and replacing it with tariffs on imports. This would lead to huge price hikes, which would hurt everyone but the wealthy. Think the cost of living is high now? Just wait and see what happens if Trump gets another term,” former Secretary of Labor Robert Reich stated.

“Trump’s tax proposal to replace a major amount of income-tax revenue with tariffs is a prescription for the mother of all stagflations. It burdens the middle class and the poor who purchase goods on international markets. It would also create worldwide economic warfare. The Smoot-Hawley tariffs did enormous damage–some people would say it made the depression great–were 6/10 of 1% of GDP. If you replaced half of income tax revenues with tariffs, those would be tariffs six times Smoot-Hawley levels,” Harvard President Emeritus Lawrence H. Summers said.

“CEOs in meeting with Trump said he was pandering and all over the place as he allegedly proposed replacing income taxes with tariffs. If the US was to replace income taxes with tariffs, not only would inflation soar but the lower and middle classes would be devastated. If you massively tax imports, prices will rise significantly. Since the lower and middle classes spend the majority of their income, this means almost the full tax burden is shifted to the less wealthy Americans while the ultra wealthy Americans effectively have nearly no tax burden. Trump is for the wealthy, not the little guy. We saw this with his $2T corporate tax cuts,” Democrat pundit Brian Krassenstein noted.