Question

Trump's huge national sales tax on most goods—by executive order—will replace income tax.

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Trump’s massive national sales taxes on most goods, imposed unilaterally by executive order, will pay for everything so you will pay no income taxes. Amazing!

Answer 1

Overall this claim is exaggerated. This claim comes from a Donald Trump social media post where Trump states "many people's Income Taxes will be substantially reduced, maybe even completely eliminated." According to CNN Trump many times has voiced that his tariffs will cut income tax. In order for tariffs to equal income tax they "would have to be  at least 100% on all imported goods". Thus the tariffs will not replace income tax and may or may not cut them in general.
https://www.cnn.com/2025/04/28/business/taxes-trump-tariffs/index.html

Comments

I agree with your point that the claim is exaggerated, as it is unlikely that sales taxes or tariffs could fully replace income tax. For this to work, the taxes would have to be very high, which does not seem practical. What would the actual economic impact be if tariffs or sales taxes were raised significantly to replace income tax?

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Essentially, the claim insinuates that Americans won't need to pay income taxes. So this is exaggerated? Or false?

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Even though your answer gave a source, I wouldn't say CNN is a reliable source. If you were able to include another more reliable source, this would've been a good answer. I liked how you were able to include what the article said in your response to back up what you answered.

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This answer included great insight on the origins of where the statement came from!  I also appreciated the quick summary from the CNN article offering details about how much the tariffs would have to be to replace income tax.

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It is seems as if you say the claim is false after marking it as misleading? Asserting that the current tariffs Trump is imposing do not eliminate income tax directly opposes the answered claim. You succinctly answered the claim but I might rethink your response as the conflict between your answers make your stance confusing and adds more uncertainty to the topic.

Answer 2

Although this is true, it is an exaggerated claim. The Trump administration would like to replace the IRS with tariffs, therefore increasing the price of goods and abolishing the IRS. According to the article by CNN, Trump Wants to 'Abolish' The IRS and Replace it with Tariffs. Can it Work?, Trump wants to push for increased tariffs and have taxpayers put their money towards goods instead of having their income taxed and having to pay the IRS. This sounds simple but it is far more complicated than just getting rid of the IRS and increasing tariffs. The prices of things would increase tremendously and there would be a very specific price point that would need to be reached for this plan to work. Furthermore, Trump is currently implementing tariffs which is leading to increased prices for consumers and American citizens still need to pay income taxes. Trump has also failed to follow through with decreasing taxes or getting rid of the IRS, resulting in Americans paying taxes and higher prices. This claim is true but it is very misleading.

Here is the link to the CNN article - https://www.cnn.com/2025/02/20/economy/trump-abolish-irs

Answer 3

In the Truth Social post that the provided link references, Trump said that the elimination of income tax would focus on those making under $200,000. In another source, he has verbally said, "that the revenue raised by his tariffs 'will be enough to cut all of the income tax' in the U.S" (CBS).

Either way, income tax will not be entirely eliminated because the potential revenue earned from tariffs would not come close to the sum of income tax revenue. The current tariffs would raise $170 billion this year; in comparison, income taxes from earners under $200k would raise $700 billion this year. The math doesn't work.

It should also be noted that, while Trump has the power to execute tariffs, income taxes can only be reduced through Congress. Therefore, Trump does not have the individual power to promise that he will eliminate income taxes. According to Erica York, the vice president of federal tax policy at the Tax Foundation, Congress would not agree to this replacement due to its impossible viability.

Additionally, there are few current measures being taken to see a reduction or elimination of income taxes. There is only an attempt to extend tax cuts from 2017 through a reconciliation bill, which will also eliminate taxes on employee tips.

Even if income taxes were to be replaced with tariffs, there would be far more economic hardships than benefits for those making under $200,000 per year. This is because middle and low-income Americans spend more of their income on the basics taxed by tariffs than high-income Americans do. Where low-income households will likely see their disposable income fall by 5.5% due to the current tariffs, disposable income will only fall 1.9% for high-income families (Yale Budget Lab, cited in CBS).

https://www.cbsnews.com/news/trump-tariffs-tax-cut-below-200000-income-what-to-know/