Former President Donald Trump backed his idea of abolishing the income tax and replacing it with tariffs in an interview Friday. Joe Roganhost of one of the most widely listened to podcasts in the world.
“Did you just come up with the idea of abolishing the income tax and replacing it with a tariff?” Logan asked the Republican presidential candidate in a three-hour interview. “Are we serious about that?”
“Yes, that’s true, but why not?” Trump responded.
“We will not allow our enemies to come in and take our jobs, take our factories, take our workers, take our families, unless they pay a heavy price. And a great price. is a tariff,” the former president added.
The centerpiece of President Trump’s economic plan for voters is major tax reform, including a proposal to erode the income tax system and replace it with aggressive tariffs.
He wants to renew the 2017 tax breaks that expire in 2025, as well as eliminate income taxes on tips, overtime and Social Security benefits. He also said he would consider exempting firefighters, police officers and military personnel from income tax. and veterans.
Repealing taxes on tipped income, overtime pay and Social Security alone would cost an estimated $2 trillion over 10 years, according to a nonpartisan think tank. tax foundation. The addition of President Trump’s other tax exemption proposals will only increase those costs.
President Trump sees his aggressive tariff policy vision as a way to offset those costs.
He has proposed imposing a flat 20% tariff on imports from all countries, with particularly high tariffs on imports from China.
but tax expert and economic analyst I don’t think President Trump’s tariffs are an adequate counterbalance to balance the trillions of dollars lost from repealing the income tax.
“It would be impossible to raise tariffs high enough to cover anything close to that amount.” [of income tax revenue]”If tariffs go up, imports will go down,” Garrett Watson, senior policy analyst at the Tax Foundation, told CNBC earlier this month.
Watson added that President Trump’s tariffs are likely to generate an estimated $3.8 trillion in revenue over 10 years, compared to $33 trillion from personal income taxes over the same period.
All told, Trump’s entire tax plan, including the tariffs, would increase the deficit by $3 trillion over 10 years.
“The math doesn’t work,” Watson said.
Additionally, President Trump’s tariffs would be paid by U.S. importers, increasing costs for producers and potentially leading to higher consumer prices just as inflation is beginning to subside.
In effect, these tariffs could replace income taxes with a type of new sales tax, placing the tax burden heavier on low-income people.
Vice President Kamala Harris has adopted economists’ analysis of President Trump’s tariffs as a talking point in her campaign.
“It would be a sales tax on the American people,” the Democratic candidate said in an interview with MSNBC’s Stephanie Ruhl in September.
“Imposing a 20% tariff on all imported goods he described would essentially impose a 20% sales tax on basic necessities for the average American worker, the average American family. It will be imposed.”
