16 hours ago
Fact-check: Can tariffs replace the income tax?
From Tiana Lowe Doescher
Despite the Supreme Court overruling the centerpiece of his sweeping, second-term tariff regime, Trump insisted that not only would he maintain his taxes on imports but that they would “substantially replace the modern-day system of income tax.”
Trump’s tariffs have indeed made a nontrivial dent in the federal budget deficit, with the overruled IEEPA tariffs responsible for a roughly 6% reduction in the deficit in the first third of the fiscal 2026 relative to the year prior. Trump’s overall customs collections of $119 billion in the first four months of this fiscal year would amount to nearly a half-trillion dollars.
But the federal government collected almost $2.7 trillion last year, or over five times as much as Trump’s tariffs would generate even if the high court hadn’t overturned the legal justification for his tariffs.
Furthermore, the deficit is already historically unprecedented for a country with such a robust economy, currently involved in no war. Recall that the federal government spent over $7 trillion. Where would Trump find the next $6.5 trillion on top of his tariffs?
