Reports from independent economic think tanks or government agencies

Trump Proposes Replacing Income Tax with Tariffs, $500 Billion Middle-Class Tax Hike

Jun 13, 2024, 04:52 PM

Former President Donald Trump has floated the idea of replacing the income tax with an 'all tariff policy,' according to sources. During a meeting with House Republicans, Trump suggested that tariffs could be used to eliminate taxes on tips and counter adversaries. He noted that tariffs were a key funding mechanism for government operations before World War I. Economist Paul Krugman estimated that this policy would require an average tariff rate of 133 percent. Biden campaign spokesperson James Singer criticized the proposal, calling it a historic $500 billion a year middle-class tax hike that would raise prices to benefit the richest Americans. Trump also mentioned using tariff hikes to fund some income tax cuts.