From Graham Stephan.
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NO MORE INCOME TAXES
Donald Trump has proposed eliminating the federal income tax and abolishing the IRS. Instead, the United States would rely on tariffs, similar to the 1800s when imported goods were taxed instead of individual income. If this happened, you would keep 100% of your earnings and the April 15th deadline would disappear. But is it realistic, or would it collapse the economy?
WHAT ARE TARIFFS
Tariffs are taxes on imported goods. They make foreign products more expensive so that American-made items look more competitive. The company or importer, not the foreign country, pays the tariff. While tariffs raise revenue and can shift demand to local goods, the question is whether they could ever replace trillions collected in income taxes.
HISTORY OF TAXES IN AMERICA
For the first 100 years, the U.S. government was funded almost entirely by tariffs on goods like alcohol and tobacco. But during the Civil War, a temporary income tax was introduced, repealed in 1872, and later revived during World War I. By World War II, payroll withholding and quarterly payments ensured steady revenue, and income taxes became permanent. Since then, the government has grown larger and more dependent on them.
THE NATIONAL DEBT CRISIS
The U.S. spends more than it earns almost every year, adding to the national debt. Today, spending exceeds $6 trillion annually while revenue is around $4.3 trillion. The shortfall adds $1.7 trillion a year to the debt, projected to reach $53 trillion by 2035. With $2.2 trillion coming from income taxes, eliminating them would require cutting trillions in spending or replacing them with tariffs.
WHY TARIFFS FALL SHORT
In 2025, tariffs raised about $100 billion, only 2% of the federal budget. To replace all personal income taxes, tariffs would need to increase by 22 times, raising import prices by more than 50%. Fully replacing all federal revenue would require imports doubling in cost, leading to economic collapse. Even optimistic studies suggest tariffs could only reach $780 billion, still far below what is needed.
WHY ELIMINATING INCOME TAXES IS IMPOSSIBLE
To realistically abolish the IRS, the government would need to cut spending by half, including drastic reductions in Social Security, Medicare, the military, and education. Even then, tariff revenue would need to increase at least 10 times, which would devastate trade and raise consumer prices across the board. No developed country relies on tariffs as their main funding source.
THE FINAL VERDICT
Replacing income taxes with tariffs is not possible.
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