(OurNationNews.com) Donald Trump told Republican legislators in Washington D.C. that he would consider phasing out the income tax and he would use tariffs to collect the federal government’s revenue base.
During the meeting, Trump pointed to tariffs as a useful bargaining chip against foreign adversaries like China. Trump used the same tactic during his first term to encourage American jobs and manufacturing over imported goods. Trump said on Truth Social that the meeting went very well.
Trump also suggested the concept of using tariffs to replace income taxes at a Las Vegas rally. The plan has been criticized by many, including the Treasury Secretary Janet Yellen. When asked about the potential of replacing income tax with tariffs, she said it would only be possible with a tariff rate above 100%. She said the implementation of that tariff plan would make life “unaffordable” for the majority of Americans while harming U.S. businesses.
Ron Insana, a financial reporter, said the math suggests all imported goods would need a 65% tariff in order to replace the money that is received through federal income taxes. He said this would work as a regressive tax on low and middle income families that rely on cheap goods from China and other foreign imports. Insana said President Joe Biden’s plan is to increase the income taxes to make up for a shortage in the budget. Insana said Biden’s proposals do not stand a chance of passing Congress, but Trump could implement new tariffs with executive orders.
Some other expected results from increasing tariffs on imports from foreign countries is that those countries will implement similar tariffs on exported American goods. Estimates say the U.S. federal income tax system collects $2 trillion and there are $3.4 trillion in foreign imports. Trump has positioned himself as the businessman candidate who can negotiate for the best interests of the American people. Despite that position, his latest proposal has received lots of backlash as being likely to cause more harm than good.
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