Topline
President Donald Trump said in a Truth Social post Sunday morning “many people’s Income Taxes will be substantially reduced, maybe even completely eliminated” once revenue from tariffs comes in—though economists remain skeptical.
President Donald Trump holds up a chart while speaking during a “Make America Wealthy Again” trade ... More
Trump said in the post the “focus will be on people making less than $200,000 a year”—which is more than four times the median personal income in the U.S. in 2023, according to Census Bureau data..
So far in April—despite many tariffs being paused while the Trump administration works to negotiate with other countries—the Department of Homeland Security has collected $15.86 billion in customs and excise taxes, which is an increase of about $6 billion from March.
Trump also said a “massive number of jobs are already being created, with new plants and factories currently being built or planned.”
Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you'll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.
“It will be a BONANZA FOR AMERICA!!! THE EXTERNAL REVENUE SERVICE IS HAPPENING!!!” Trump said in Sunday morning’s post.
It’s unclear, but economists say it’s unlikely. One study from the Council on Foreign Relations said the claim that tariffs could completely replace income tax is “absurdly off-base, since it is mathematically impossible” to generate the necessary revenue even at the U.S.’ current import rates. That study found tax revenue for the bottom 90% of Americans is around $576 billion, and estimated that after fewer countries import to the U.S. because of tariffs, there won’t be enough revenue generated to offset the income taxes of the bottom 90%.
That’s also unclear as the Trump administration says it is still negotiating rates with many countries. In January, after Trump said he would impose a 10% tariff on imports from China and a 25% tariff on those from Mexico and Canada, the Committee for a Responsible Federal Budget reported the tariffs could increase this year’s revenue by $140 billion and raise $1.5 trillion through fiscal year 2035. But most tariffs on Canada and Mexico were paused, and China’s tariff rate was most recently up to 145%. Trump’s White House trade adviser Peter Navarro said in early April he thought tariffs would bring in about $600 billion a year, though economists have argued that number is too high, CNBC reported. The Yale Budget Lab estimated as of April 15 the tariffs to date this year will raise $2.4 trillion from 2026-2035, but will have “$631 billion in negative dynamic revenue effects.”
Trump mentioned the possibility of tariff revenue eliminating U.S. income taxes at a meeting with Republican lawmakers in June, before he won reelection to the White House. At the time, Trump reportedly suggested the tariff money would be enough to eliminate all income tax, though more recently he has shifted to say it will eliminate income tax for poorer Americans. As recently as April 15, Trump said in a Fox News interview, “there is a chance that the money from tariffs could be so great that it would replace [income tax].”
A poll from The Washington Post, ABC News and Ipsos released Friday found that almost two out of three Americans don’t approve of Trump’s handling of tariffs. The poll, which surveyed more than 2,400 U.S. adults, found 64% disapprove of how Trump is handling tariffs on imported goods, with 96% of Democrats and 25% of Republicans disapproving.
Trump said 'there is a chance' tariff revenue could replace the income tax. Economists are skeptical (CNBC)
Most Americans disapprove of Trump on tariffs, Post-ABC-Ipsos poll finds (Washington Post)