economy
February 27, 2026
Trump said tariffs could someday 'substantially replace' income taxes. What policy experts say
During his State of the Union address, President Donald Trump said tariffs could someday "substantially replace" the federal income tax system.
TL;DR
- President Trump believes tariffs paid by foreign countries could substantially replace income taxes.
- Policy experts are skeptical, stating the math does not support this claim.
- Historical context shows tariffs were a larger revenue source when the government was smaller.
- Current income tax revenue significantly exceeds revenue generated by customs duties.
- Extremely high tariffs could be detrimental to the economy and reduce import revenue.
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