What Would America Look Like Without Income Tax? Trump Says the Country May Soon Find Out

Former President Donald Trump is again altering the national discussion by claiming the US may eliminate federal income taxes. His Cabinet meeting remarks this week have spurred new debate over how the federal government would run without one of its main funding sources.

Trump lauded his trade policy and said tariffs are earning “trillions of dollars”. These monies could fund federal spending, refund payments, and debt reduction, he claimed. Trump believes tariff revenue might abolish income taxes.

He informed officials that the incoming money was “so great” that it might replace the current tax system and leave Americans with “no income tax to pay.” Trump has considered this before. In a video conference with U.S. military personnel days before, he predicted “substantially cut” or elimination of income taxes over the next few years.

The prospect of a tax-free paycheck may be enticing, but economists have swiftly noted the large discrepancy between income taxes and tariffs. Federal income taxes account for nearly half of government revenue. Income taxes generated $2.7 trillion last fiscal year, funding federal programs, operations, and services.

Tariffs produced far less. The federal government spent almost $7 trillion last year, and tariff revenue is insufficient to fund it, according to experts. Progressive economist Dean Baker warned that tariffs alone would skyrocket the government deficit. He noted that replacing income tax revenue with tariffs will cost the government nearly $2 trillion annually, driving the deficit to record highs.

Not everyone in the government supports Trump’s big prediction. Treasury Secretary Scott Bessent supports tariffs for “tax relief,” but not income tax elimination. While he believes tariffs could reduce taxpayer burden, he has not suggested they could support the federal government.

The argument has rekindled a nationwide debate about how the US should produce revenue and what tax system best serves the people. Trump’s plan might help millions of Americans financially, say supporters. The government would need vast debt to function without income taxes, according to critics.

Trump’s pursuit of a new tax structure is expected to remain a political issue. Whether the nation could operate without income tax or if tariffs could ever support it is unknown. Trump made the matter central to his economic platform, so Americans are now discussing the future of taxation.