From Yahoo Finance: 2025-05-02 11:52:00

In the 1800s, tariffs generated significant federal revenue without income tax. President Trump aims to replicate this model, proposing to replace income taxes with tariffs. However, analysts dismiss this plan as unrealistic.

Trump has already raised tariffs, significantly impacting businesses and consumers. He suggests cutting income taxes for lower earners to offset the tariff burden.

Replacing income tax revenue with tariffs would require unfeasibly high rates and depress imports further, hindering economic growth.

Trump’s idealization of the past fails to acknowledge the drawbacks of the Great Tariff Era, including economic downturns and financial instability.

Critics argue that the modern federal government’s spending is essential for social welfare programs and national security, making drastic changes like replacing income taxes with tariffs impractical.

Analyses show that replacing income tax with tariffs would not generate sufficient revenue and would harm the economy, highlighting the complexity and challenges of such a transition.

Read more: Commentary: Trump’s terrible tariff math