Summary
President Trump has stated he wants to replace U.S. income taxes with tariffs, which are taxes on imports. However, current revenue from tariffs is much less than that from income taxes, making it difficult to replace one with the other.
Key Facts
- President Trump wants tariffs to replace U.S. income taxes.
- Income taxes generated about $2.6 trillion in the latest fiscal year.
- Tariffs brought in about $195 billion in the same period, much less than income taxes.
- Economists say raising tariffs won't make up the revenue gap because higher tariffs could lead to fewer imports being bought.
- The Supreme Court recently overturned previously imposed tariffs, affecting Trump’s economic plans.
- President Trump plans to implement a new 15% global tariff.
- There is a discrepancy, with a Customs memo stating the tariff rate as 10%.
- The administration's plan is expected to reduce tariff revenue over time if more goods are made in the U.S.
