Could Trump eliminate income tax by relying on tariffs for revenue?

Could income tax become a thing of the past? Recently, U.S. President Donald Trump suggested the possibility of entirely eliminating income taxes. This announcement came during an address to military personnel, where he proposed that this radical shift could be financially supported through increased tariff revenues. Trump asserted, “Over the next couple of years, I think we’ll substantially be cutting and maybe cutting out completely, but we’ll be cutting income tax.” He projected that government revenues from tariffs could significantly rise, thus offsetting the need for individual income tax. The idea of removing such a crucial source of government funding is indeed audacious, especially considering that in fiscal year 2025, individual income taxes constituted approximately 50.7% of total U.S. federal government revenues, amounting to $2.656 trillion. In contrast, tariff revenues were only around $195 billion, a stark difference that prompted skepticism from experts. Economist Erica York from the Tax Foundation criticized the feasibility of Trump's plan, labeling it “mathematically impossible.” She elaborated that replacing the nearly $2 trillion generated by individual income tax with tariffs would necessitate "astronomically high tariff rates," which might ultimately reduce imports and fail to generate sufficient revenue. Additionally, it is pertinent to consider that even with income tax contributions, the federal government still experienced a deficit of $1.775 trillion in fiscal 2025, with total outlays reaching $7.010 trillion against revenues of $5.235 trillion. Amid ongoing debates about tax cuts and reform, individuals seeking to reduce their tax burden may explore various investment strategies. For instance, marketing professor Scott Galloway advises individuals to minimize taxes by leveraging their investment portfolios wisely. He suggests holding onto appreciating assets like stocks and borrowing against their value rather than selling and realizing capital gains, which triggers tax liabilities. Galloway highlights this with an illustrative example: if one owns $100 worth of Amazon stock that has appreciated by 50%, instead of selling and incurring taxes on the capital gains, one could borrow against the stock, allowing it to continue growing without triggering a taxable event. For those looking for accessible investment options, Warren Buffett advocates for investing in the S&P 500 index fund, stating that it provides broad exposure to leading companies and minimizes the need for constant management. Investors can even begin with minimal amounts through platforms like Acorns, which allows users to invest small spare changes into diversified portfolios. Moreover, real estate remains a favored asset class for many, offering tax advantages through rental income deductions and depreciation benefits. Platforms such as Arrived facilitate fractional real estate investments for as little as $100, making the market more accessible than ever. Additionally, accredited investors can diversify their portfolios by investing with First National Realty Partners, which offers investments in commercial properties leased by established brands without the burdens of traditional property management. For those wishing to focus on tax efficiency, personalized financial planning platforms like Range can provide tailored tax strategies and investment advice.