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Former President Donald Trump voiced support for eliminating income taxes and replacing the revenue with receipts from tariffs.
During a three-hour episode of the Joe Rogan Experience on Friday night, the Republican frontrunner blasted companies that move production from the U.S. to other countries and threatened them with huge tariffs.
He added that the word tariff is “more beautiful than ‘love,’” and said the U.S. can become rich with the proper use of tariffs.
“Did you just float out the idea of getting rid of income taxes and replacing it with tariffs?” Rogan asked. “We’re serious about that?”
Trump replied, “Yeah, sure, but why not?”
He then repeated praise for William McKinley, who was president from 1897 until his assassination in 1901, calling him the “tariff king.”
“We will not allow the enemy to come in and take our jobs and take our factories and take our workers and take our families, unless they pay a big price,” Trump added. “And the big price is tariffs.”
This isn’t the first time he has hinted at the elimination of income taxes. In June, Trump floated the idea that revenue from tariffs could replace federal revenue from income taxes.
And during a Fox News segment at a Bronx barbershop on Monday, Trump was asked if the U.S. could end all federal taxation, prompting him to praise policies from the late 19th century.
“It had all tariffs, it didn’t have an income tax,” he said. “Now we have income taxes, and we have people that are dying. They’re paying tax, and they don’t have the money to pay the tax.”
In addition to extending the tax cuts that were passed during his presidency, Trump has also teased a slew of tax eliminations, including taxes on tips, overtime pay, and Social Security payments, as well as exemptions for the military, veterans, and first responders.
Such talk has raised alarms among budget watchdogs, who have warned on the exploding federal deficit. While it will expand under either Trump or Kamala Harris, the Penn Wharton Budget Model and the Committee for a Responsible Federal Budget have said Trump’s policies would produce a much deeper hole.
As Wall Street starts to price in growing odds of a Trump victory in November, U.S. bond yields have climbed as the Treasury Department would be expected to flood the market with bigger auctions to finance widening deficits and bigger debt interest payments.
Meanwhile, many economists have dismissed the idea or tariff revenue replacing income tax revenue. Garrett Watson, a senior policy analyst at the Tax Foundation, told CNBC that Trump’s tariffs would generate an estimated $3.8 trillion in revenue over 10 years, just a fraction of the $33 trillion that individual income taxes generate.
Trump’s plan for across-the-board tariffs, with outsized hikes on countries like China, would also largely be passed on to American consumers, raising prices and likely stoking inflation, economists have said.
And as other countries retaliate with tariffs of their own, U.S. exporters would be impacted, while a shift away from costlier imports would weaken the revenue that Trump tariffs could produce.