Direct file and DOGE issues, fear of deportation, belief that the IRS will be dismantled... it's amazing how many different ways the current administration has damaged its revenue streams.
The income tax revenue stream is absolutely being damaged. Your belief that tariffs will supplement the federal revenue stream seems to be based on the assumption that no other variables will change with reciprocal tariffs between the US and rest of the world.
Those numbers are monthly and include services, but summing up the US imports over the same period (October 2024-February 2025) we get $1.86 trillion dollar. To replace our income tax revenue over this period we'd need a 50% tariff on all imported goods and services.
What level of tariffs should we aim for so that we can reduce our federal income tax rates and increase or maintain overall revenue as you claim will happen?
Tariffs are paid locally, in USD from the US economy to the government. Foreign states do not pay tariffs to the US government, they are paid by the business or entity importing the goods.
So this will not bring in more money. All the tariffs are paid from money that already exists in the domestic US economy.
Furthermore, tariffs are passed to consumers. Transitively this is an increased tax burden on consumers. Our taxes have, in effect, gone up.
The white house numbers assume 75% of the tariffs will be paid by foreigners.
That’s actually not a crazy assumption for targeted tariffs. Imagine we only added a tariff to German cars. BMW and VW would have to compete with normally priced sedans, and lower their margins.
Of course, that doesn’t work if you tariff 100% of the suppliers of essential goods.
> BMW and VW would have to compete with normally priced sedans
What will keep the US auto makers from just being 5% under the imports' price? They will still win on cost, can blame Trump, and also capture all the money on the table.
> Tariffs are going to bring in huge amounts of money. Which in turn can and should result in lowered taxes.
Tariffs are taxes. Are you really going to be happy if you pay less in taxes but make up for it by paying tariffs?
But I wouldn't be so quick to rejoice. During Trump's previous term much of the money collected was given to farmers as subsidies for their losses from the counter tariffs.
> Are you really going to be happy if you pay less in taxes but make up for it by paying tariffs?
FWIW, there are proponents of something called Fair Tax, which replaces income tax with a national sales tax. Either 25 or 30% IIRC. I never looked at it to determine if it was viable, but it seemed to have some level of support because I kept seeing it pop up.
From what I can tell, that isn't completely different to the idea of replacing income taxes with tariffs, I guess, except that it doesn't apply to US goods.
Source? Everything I'm seeing shows the opposite. Only the current administration seems to be saying that, but they lie out both sides of their mouth every day.
