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President Donald Trump makes a lot of ludicrous promises about tariffs. None perhaps more preposterous than the claim that they will soon replace income taxes and pay off the national debt.
Once again, last week, Trump predicted that “over the next couple of years, I think we’ll substantially be cutting them, maybe cutting out completely, but we’ll be cutting income tax, could be almost completely cutting it because the money we’re taking in is going to be so large.”
The ability to jump from “maybe” cutting to “almost” cutting to “sustainably” cutting to “completely” cutting income tax in a single sentence speaks to the complete absurdity of the premise.
The first problem, even for supporters of protectionism, is that revenue generated from Trump’s tariffs isn’t meeting expectations. In August, the aggressively inaccurate Treasury Secretary Scott Bessent predicted tariffs would raise “well over half a trillion, maybe toward a trillion-dollar number.” Commerce Secretary Howard Lutnick promised tariffs would raise over $50 billion a month.
The Congressional Budget Office now predicts tariff revenue will be $400 billion a year, around $30 billion a month, or $100 billion less than it forecasted during the summer. The United States collected $195 billion in tariff revenue during 2025, which amounts to 3.7% of all tax receipts and 2.7% of all spending.
This isn’t necessarily a bad thing for consumers, because, among other factors, it means Trump has been walking back tax hikes to stave off price spikes. If the administration had followed through on “Liberation Day” promises, the economy would likely be in big trouble.
Even if the Trump administration’s lofty guesstimates came to fruition, it still wouldn’t come anywhere close to eliminating income taxes. As of now, people pay around $2.6 trillion in individual federal income taxes yearly. The government would need to generate around — let’s be charitable — a 1,000% increase in tariff yearly revenue “over the next couple of years” before any initial discussion about eliminating federal income taxes without plunging the nation into a debt emergency.
Or, rather, a bigger one than we already have.
None of this even considers the damage that historically high tariffs would have on overall economic activity and tax receipts.
Remember, this is all allegedly aimed at helping the “working class.” Right now, the top 50% of all taxpayers are on the hook for something like 97% of income taxes. Tariffs are a more regressive form of taxation than personal income tax, which is perhaps one of their only redeeming features. This is why populist senators and Trump keep promising the public $2,000 rebate checks from the “literally trillions of dollars” of imaginary revenue generated by tariffs.
A rebate check is just another means of redistribution. Surely there are less destructive ways of socializing the economy than setting up a byzantine and erratic regulatory regime to redistribute cash.
Then again, no one, as far as I know — no think tank or administration official or congressional leader — is even proposing any policy that would gradually, or ever, eliminate income taxes, probably because the notion exists solely in Trump’s imagination.
“We were at our richest from 1870 to 1913,” the president has argued. “That’s when we were a tariff country. And then they went to an income tax concept.”
He’s wrong. We are the richest right now. And it’s not particularly close. Of course, in 1913, the federal government spent around 1% of GDP. Today it spends around 25%. There’s no indication that we won’t spend more in the future.
And yet, another Trump promise that seems to resonate with his supporters entails the notion of paying off the national debt with tariffs. The president says deficits are mere “peanuts” compared to revenue from tariffs. “You got to remember — this is going to pay off our deficit,” Lutnick told Face the Nation over the summer.
According to CBO estimates, Trump’s tariff increases on imports from foreign countries will reduce deficits by $3 trillion over 10 years. Even as it stands, that’s still a trillion less than the $4 trillion the agency projected in August and far less than the too-numerous-to-mention fictional numbers thrown around by the administration.
Nevertheless, you can plug in the rosiest Make America Great Again prediction, and it still would take around a century of tariffs to pay off the debt — that’s if we didn’t add another penny from this moment forward. The feds added $1.8 trillion to the debt in 2024 alone, a record. The debt is projected to grow by nearly $22 trillion over the next decade. It’s now at $38 trillion. It generally grows more than projected. Of course, tariffs are unilaterally implemented according to the whims of one mercurial man, so forecasting is nearly impossible anyway.
The emotional impetus for protectionism is a romantic notion that tariffs will rehabilitate manufacturing and “reshore” jobs, saving the “working class.” Yet, U.S. manufacturing has now contracted for the ninth consecutive month during the Trump administration, a decline that most manufacturers have attributed to unpredictability and the cost of tariffs.
There’s a faction on the modern Right that is intent on bringing back low-paying menial factory work for Americans. Their case is based on the widespread myth that we have “deindustrialized” even when output is at an all-time high in real, inflation-adjusted terms. The U.S. is the world’s second-largest manufacturer and exporter after China, which has four times the population. Only about 17% of the U.S. economy is imported goods and services.
Yet, many voters are apparently under the impression that Americans, who enjoy a $89,000 per capita GDP, should be copying the trade policies of the Chinese, who have a $13,000 GDP per capita.
Then again, there’s rarely any coherence or consistency to pro-tariff messaging. When it suits his needs, Trump argues that tariffs will help implement “fair” deals and open even more free trade.
SIGNS OF HOPE FOR TRUMP AND THE GOP WITH HISPANICS
These days, protectionists claim that tariffs are successful because the economy hasn’t collapsed as “panicans” allegedly predicted. Serious critics of protectionism, however, have always conceded that we are wealthy and resilient enough to withstand bad economic policy without crumbling. This has been the case through numerous presidents.
But we judge policy by whether it lives up to the promises made by those who implement it. Not one of the administration’s promises has been fulfilled. And it’s extraordinarily unlikely they ever will be.
