President Trump on Tuesday ignited excitement amongst taxpaying Americans by boldly predicting they could soon bid farewell to income taxes entirely. While incredibly ambitious the president’s plan would usher in a world of tax freedom for hardworking families.
Can he do it though. Trump sure thinks so.
Speaking to reporters the president teased the White House’s aggressive exploration of alternative revenue streams which already include tariffs and trade war resets with numerous countries. The result perhaps would be no income taxes.
Trump told reporters the American people at some point in the not too distant future won’t even have income tax to pay.
“Whether you get rid of it or just keep it around for fun or have it really low, much lower than it is now, but you won’t be paying income tax.”
Skeptics and there will be many will suggest this is an example of the President over-promising on something and setting voters up for disappointment.
Joseph Lavorgna an economist who serves as counselor to Treasury Secretary Scott Bessent does not appear to be in that camp. He recently wrote an op-ed insisting Trump is making life affordable again for every American citing the One Big Beautiful Bill Act.
“From higher take-home pay for hardworking families to tax incentives that will drive a disinflationary boom, the One Big Beautiful Bill was engineered to Make America Affordable Again. This historic tax reform will ensure that Main Street prospers alongside Wall Street in President Trump’s Golden Age economy.”
Could President Trump deliver a Golden Age for our wallets or our personal bank accounts. Improving the conditions of both is an absolute must before the midterms.
Bessent meanwhile spoke at the cabinet meeting predicting increased tax refunds and wage growth in the coming months.
Trump’s prediction of a world without income taxes for the American people is in line with previous comments and with the establishment of the External Revenue Service which he mentioned in his inaugural address.
“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens. For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties, and revenues. It will be massive amounts of money pouring into our Treasury, coming from foreign sources.”
Trump continued his vision.
“The American dream will soon be back and thriving like never before.”
A key goal of Trump’s fair-trade policies is to shift the U.S. tax base from one primarily reliant on income taxes to one that takes in revenue from other streams. Tariffs though they have their detractors are a primary source.
“It’s time for the United States to return to the system that made us richer and more powerful than ever before. Instead of taxing our citizens to enrich foreign nations, we should be tariffing and taxing foreign nations to enrich our citizens.”
Fox News reports that his latest comments mark the most explicit endorsement yet of eliminating income taxes.
If enacted abolishing income tax would mark the most ambitious overhaul of the American tax system in more than a century according to their assessment.
The External Revenue Service represents a fundamental shift in how America funds its government. Rather than taking money from citizens through payroll deductions the government would collect revenue from foreign countries through tariffs.
Trump’s vision returns America to how it operated before 1913 when the income tax was introduced. For most of American history the federal government funded itself through tariffs and customs duties not by taxing citizens’ earnings.
The One Big Beautiful Bill Act that Lavorgna referenced aims to restructure the entire tax system. It would reduce or eliminate income taxes while increasing revenue from international trade.
Treasury Secretary Bessent’s prediction of higher tax refunds and wage growth suggests the administration believes tariff revenue can replace income tax revenue. This assumes tariffs will generate sufficient funds to cover government operations.
Critics argue tariffs act as a tax on consumers because imported goods become more expensive. However supporters counter that tariffs encourage domestic production which creates jobs and raises wages for American workers.
The Golden Age economy Trump envisions would see working families keeping their entire paychecks rather than losing a third to federal taxes. The psychological impact alone of not having money withheld from every paycheck would be enormous.
Trump’s comment about maybe keeping income tax around for fun but really low suggests he understands completely eliminating it may not be politically feasible. Even drastically reducing it would represent a massive win.
The shift from internal taxation to external revenue collection through tariffs aligns with Trump’s America First philosophy. Why tax Americans to fund the government when foreign nations can pay instead through trade duties.
