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In a bold move to overhaul the U.S. tax system, former President Donald Trump proposed eliminating income tax for American citizens on Monday, presenting the plan as a strategy to boost disposable income and restore economic prosperity. Speaking at a House Republican Members Conference, Trump framed his proposal as a return to the economic principles that he claims once made America a global powerhouse.
“It’s time for the United States to return to the system that made us richer and more powerful than ever before,” Trump stated. “Instead of taxing our citizens to benefit foreign nations, we will tax foreign nations to enrich our citizens.”
President Trump calls to abolish federal income tax in the United States.
“Instead of taxing our citizens to enrich foreign nations, we should be tariffing & taxing foreign nations to enrich our citizens.” pic.twitter.com/nFVZK7UrNp
Advertisement · Scroll to continue— Megh Updates 🚨™ (@MeghUpdates) January 28, 2025
Trump’s plan relies on reinstating a tariff-based revenue model, similar to the system used during the late 19th and early 20th centuries. He pointed to the period from 1870 to 1913, which he described as one of the wealthiest eras in U.S. history, when import tariffs served as the primary source of federal revenue.
To address the revenue shortfall from the abolition of income taxes, Trump proposed imposing broad import tariffs on goods entering the United States. He also announced the establishment of a dedicated agency, dubbed the “External Revenue Service,” tasked with overseeing tariff collection and ensuring compliance.
“This will generate massive amounts of money for our treasury, pouring in from foreign nations instead of burdening our hardworking citizens,” Trump declared, emphasizing his commitment to “protecting American workers and families.”
However, Trump’s proposal has sparked debate among policymakers and economists. Critics warn that relying on tariffs could lead to higher consumer prices, inflationary pressures, and prolonged elevated interest rates. Some members of Congress have also voiced concerns about the potential impact on trade relationships and the risk of escalating deficits.
While Trump’s plan faces significant legislative hurdles, it has reignited discussions about alternative tax systems and their potential to reshape the U.S. economy. As the nation grapples with balancing economic growth and fiscal responsibility, Trump’s proposal is sure to remain a topic of heated debate in the coming months.
