Donald Trump just threw out his most extreme tax idea yet: cut out federal income taxes entirely. The former president shared this on a Fox News segment, fielding questions at a Bronx barbershop.
When someone asked if America could scrap income taxes, Trump said he wants to pull the U.S. back to the economic setup of the late 19th century, when there were no income taxes at all.
“It had all tariffs,” he reportedly explained, comparing it to the pre-1913 U.S. economy. “It didn’t have an income tax. Now we have income taxes, and we have people that are dying. They’re paying tax, and they don’t have the money to pay the tax.”
His solution? Replace income taxes with revenue from tariffs. He hinted at cutting more taxes for different income types and offered big breaks to certain groups. Think police, firefighters, military.
Could tariffs replace income tax?
Trump’s plan brings up a few questions. The biggest one is can tariffs actually cover what income taxes bring in? America took in around $4.2 trillion last fiscal year from income and payroll taxes.
Tariffs, on the other hand, would barely make a dent. Even if Trump’s plan involved tariffs on every single import, the $3 trillion in imported goods still wouldn’t cover the gap left by cutting income and payroll tax revenue.
Plus the way tariffs work hits Americans differently. Income tax is progressive; high earners pay a higher rate. And Trump claims companies abroad pay for these tariffs. Economists disagree, pointing out that companies pass costs to consumers through higher prices.
So, tariffs would raise prices on basics like food and clothing, slamming lower-income Americans with higher costs. That’s not going to be good for the already wobbly economy.
But Trump hasn’t laid out all the details yet, and he hasn’t even said if he plans to end corporate and payroll taxes or just individual income tax.
Liberals and conservatives both call his idea “unworkable” and “dangerous” for the economy. Even if Republicans control Congress, many say the odds of getting rid of income tax are close to zero. Still, Trump keeps pushing, saying, “There is a way, if what I’m planning comes out.”
America PAC and Musk’s millions
Enter Elon Musk. Musk has been throwing his weight and cash into Trump’s campaign through his PAC, America PAC. In just the first half of October, the billionaire pumped around $44 million into the PAC. His spending hit $75 million between July and September.
With Musk’s millions, America PAC is zeroing in on battleground states, spending more than $47 million already in October.
That money is part of Trump’s push to get out the vote, as his campaign heavily relies on outside groups to reach voters. The PAC also launched a daily $1 million giveaway to boost Trump’s numbers in swing states.
Registered voters in these states can enter the PAC’s online petition for a shot at winning. But this quickly caught the attention of the Justice Department, which sent a letter warning America PAC about possible legal issues with these cash giveaways.
Meanwhile, Trump’s campaign is blowing through cash, spending over $88 million on ads in early October. They’re left with $36 million in their campaign bank for the final stretch.
He raised $16 million in the same period. Harris’s campaign, meanwhile, has more funds, raising $97 million in October’s first half and holding $119 million by mid-month.
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