Trump proposed eliminating income tax

Trump said he may “substantially” cut and potentially “completely” eliminate the federal income tax in the coming years.

He argued this could be possible because revenues from tariffs (taxes on imports) have increased significantly under his administration, and that those tariff revenues could replace much of the money the government currently collects from income taxes.

Why he says this is possible

The idea rests on using fast-growing tariff revenue instead of income taxes to fund federal spending. Tariffs have brought in more money recently under his trade policies.

By shifting the burden to tariffs, Trump’s plan would reduce or even eliminate the need for Americans to pay taxes on their wages, salaries or other regular income.

What to keep in mind / What critics note

Income tax has been a foundation of federal government revenue

replacing it with tariffs would require a massive increase in tariff income. Estimates suggest that tariff revenue would need to increase manyfold to match what is raised now from income tax.

Some analysts and experts cast doubt on whether tariffs alone can reliably and sustainably replace income tax revenues

due to economic, trade, and budgetary realities.

What this means in practice

If enacted as proposed, many Americans could see their federal income-tax bills shrink dramatically

or go away altogether.

However, the plan would likely mean higher tariff burdens (on imports), potentially raising costs of goods and affecting trade.

The shift would represent a major restructuring of how the U.S. funds its government and would involve trade offs between simplicity, equity, revenue stability, and consumer costs.