Should the U.S. Eliminate Income Taxes and Replace Them With Tariffs? A Look at the Numbers Behind a Bold Proposal

Written by Michael G. Brown

In 1913, the United States introduced two historic financial policies: the creation of the Federal Reserve and the federal income tax. At the time, income tax was promoted as a small, temporary measure—just 1% to 7% on the wealthiest Americans. Today, it's a cornerstone of U.S. government revenue, collecting trillions each year.

But what if we didn’t need income taxes at all?

That’s the question being raised—loudly—by a growing number of voices in the public sphere, including former President Donald Trump. He has floated the idea of eliminating federal income taxes altogether, replacing them with a new system funded largely by tariffs and massive reductions in government inefficiency.

Before dismissing the idea as political theater, let’s examine the math and historical context behind this bold claim.

Then vs. Now: A History of U.S. Tax Revenue

From 1798 to 1910, 100% of U.S. government revenue came from tariffs and excise taxes. Even as late as 1910, tariffs accounted for 50% of all federal income. Today, that figure is just 0.17%.

• 2023 Federal Tax Revenue: $4.7 trillion

• Tariff Revenue: $80 billion

• U.S. Imports in 2023: $3.83 trillion

What About Government Spending?

Critics of income tax elimination argue that the U.S. government spends far more than tariffs could cover. That’s true—federal spending was 37% of GDP in 2023, or around $10 trillion.

But here’s where the argument for tax reform pivots: inefficiencies. According to Doge.gov

• $400B/year in waste and fraud in healthcare programs

• $300B in inflated medical costs and admin overhead

• $123B in defense procurement waste

• $236B in improper federal payments

• $750B if half of the 20 million federal/state workers were cut

• $200B/year potentially collectible from U.S. military allies receiving protection abroad

These combined savings and restructuring efforts could theoretically bring the government’s spending requirement down from $4.7 trillion to under $2.5 trillion, aligning with the revenue potential of higher tariffs.

The Case Against: Would Tariffs Hurt American Consumers?

Opponents argue that replacing income taxes with tariffs would:

• Drive up consumer prices on imported goods

• Spark trade wars and retaliatory tariffs

• Hurt low- and middle-income households the most

Supporters counter that increased tariffs would incentivize domestic production, bring manufacturing jobs back to U.S. soil, and ultimately offset costs through stronger wages and employment.

So… Is Trump a Visionary or a Madman?

Here’s the million-dollar (or multi-trillion-dollar) question:

Do you truly believe Donald Trump is a fool for proposing to eliminate income taxes and replace them with a tariff-based system—while slashing government waste? Or do you think he might be on to something most politicians are afraid to even say out loud?

Let’s keep the conversation civil and fact-based. Would you support a shift to a tariff-funded government if it meant zero income tax and leaner federal operations?

Let me know what you think in the comments.