To “Eliminate Income Tax” and Fund It With Tariffs, as Trump says, is worse than an election lie: it’s a handout to the rich

Edited by Yiannis Damellos

April 18, 2026

In a country where social services are not an optional luxury but the scaffolding that keeps people from falling, who pays is not a trivia question. 

It’s the whole story.

President Donald Trump’s latest pitch—eliminating the U.S. income tax and paying for it with what he calls “massive” tariff revenue—sounds simple enough for a MAGA rally or a social-media clip. But when you do the basic arithmetic, the idea stops being a plan and starts being a political performance.

But let's examine Trump's claim: tariffs could replace the income tax

Trump has argued that tariffs will eventually replace the “modern-day system of income tax,” pointing to tariff collections that could grow dramatically. In an April 2026 State of the Union context, he framed it as the money coming “substantially” replacing income tax over time. (apnews.com)

Trump claims that tariff revenue could reach “a trillion dollars or more” next year, and that income tax could be cut “almost completely,” because the revenue would be “so large.” Yet, when we do the math, income tax is ~half of federal revenue; tariffs are far smaller

So, let’s ground this in fiscal year 2025 numbers.

• Individual income taxes (FY2025): about $2.656 trillion (fiscal.treasury.gov)
• Total federal receipts (FY2025): about $5.235 trillion (jec.senate.gov)
• Total federal outlays (FY2025): about $7.010 trillion (meaning a large deficit) (finance.yahoo.com)
• Tariff/customs duties (FY2025, as cited in your article’s figures): roughly $195 billion (jec.senate.gov)

So we’re not comparing “a little more tariffs” to “a little less income tax.” We’re comparing:

• ~$2.66T (individual income taxes) to
• ~$195B (tariffs)

That’s a gap of roughly 13–14x.

Even if you add in that tariffs can rise with higher rates, the central problem stays: imports fund tariffs, and tariffs discourage imports. Push rates high enough to replace income tax, and you don’t just raise revenue—you shrink the tax base you’re trying to harvest.

That’s exactly why critics say the proposal is not just optimistic but arithmetically implausible. For example, the Tax Foundation economist Erica York argues you’d need astronomically high tariff rates, which would in turn reduce imports and make the revenue replacement impossible in practice. (pbs.org)

Reality check: replacing income tax with tariffs is not neutral

Even if you (generously) assume tariff revenue could grow, the distributional question still matters. Who actually bears the cost of tariffs? Tariffs are formally charged to importers, but economically they tend to land on consumers (through higher prices), firms (through reduced competitiveness), and workers (through weaker demand and slower growth in traded sectors).

Income tax—imperfect as it is—directly targets personal earnings and can be structured progressively. Tariffs are less directly progressive and often function like a tax on consumption that hits people with lower incomes harder as a share of what they spend.

So when the pitch is “no income tax,” we should ask: does that mean the rich truly pay less than the poor—or does the burden just shift into prices and indirect taxes?

The math matters, but the incidence matters more.

And ultimately, who benefits? The likely answer is the upper middle (and the investor class), at the working class’s expense. 

So here is a better question: Is Trump trying to bring to his side the upper middle class that’s growing in the US at the expense of the working class?

The logic of Trump’s tax messaging is consistent with a common pattern. He promises big tax cuts that sound like relief, targeted at those who feel squeezed by costs and taxes, while social services—what they actually rely on—are either threatened by budget pressure or preserved in rhetoric but hollowed out in practice.

Then, if income tax disappears (or is sharply reduced) without a credible replacement, what fills the hole?

I'll tell you how this works. First, by spending cuts (the classic outcome), or deficits (kicking the can down the road), or some other tax system (like tariffs) that typically hurts the working class.

None of those outcomes benefits poorer working people in a sustained, equitable way. They mainly benefit those whose tax bills fall first and whose household budgets are less exposed to price shocks. Do you understand this concept, or do you want more math?

Is it an election lie? It’s worse than a lie: it’s a strategy for plausible deniability

The proposal, as stated, doesn’t pencil out given the revenue scale difference between income tax and tariffs. (fiscal.treasury.gov)

The political utility of the claim is that it sounds like free money and promises a future transition where the fine print never has to be fully demonstrated immediately.

Trump doesn’t need the plan to be feasible as a fully formed policy right now. He needs it to be believable enough to generate enthusiasm, frame himself as a tax-cut liberator, and create pressure on opponents to argue technicalities instead of defending budgets and services.

That’s why “it will replace income tax over time” is such a powerful phrase: it delays accountability.

Ultimately, this is not a budget blueprint—it’s a narrative with predictable consequences. If income taxes are reduced drastically without a realistic replacement, the government still has to fund public goods, social safety net programs, and the basic functioning of the state.

Progressive Democrats care about that because income tax is one of the mechanisms that help pay for services that disproportionately support people with fewer resources. Removing it—or “replacing it” with a revenue source that’s smaller and economically destabilizing—doesn’t magically rebalance inequality. It usually rebalances strain downward: from the people who can better absorb it to the people who can least.

So the real question isn’t whether Trump can say the words “income tax eliminated.” It’s who ends up paying when the tariff math, the policy mechanics, and the budget constraints collide.

And based on the revenue arithmetic and how tariffs work, the collision doesn’t look working-class-friendly at all.