Will Trump Replace the Income Tax with Tariffs?

President-Elect Trump has suggested that, perhaps, it would make sense to end all federal income tax and replace the income tax revenue with higher tariffs.

Mr. Trump has frequently raised the possibility of a ten percent increase in tariffs, but most analysts (who are not Trump fans) say a renewed reliance on tariff revenues would only help the rich and would increase inflation. They claim that relying on tariffs to replace the revenue brought in by the income tax would require that tariffs on imported goods be raised substantially more than the ten percent previously suggested by Trump.

But some Republicans call the idea “intriguing.” Rep. Thomas Massie (R-Ky.) posted that Trump’s suggestion was a “Most intriguing policy idea.” Massie reported that at a GOP meeting with Congress Members, “Trump briefly floated the concept of eliminating the income tax and replacing it with tariffs.”

Before the income tax was imposed in 1913, tariffs were a main source of revenue for the federal government. But, for the past 70 years, tariffs have only brought in about 2% of federal revenues.