President Donald Trump late Thursday said that the United States may “almost completely” eliminate the income tax due to the rising tariff revenue.
“In the next couple of years, I think we’ll substantially be cutting, or maybe cutting out completely, but we’ll be cutting income tax,” Trump said during an event on Thursday.
“Could be almost completely cutting it because the money we’re taking in is going to be so large,” he added.
The Congressional Budget Office (CBO) in June projected that the tariff increases will reduce the federal deficit by $2.8 trillion over the next decade.
Breitbart News Economics Editor John Carney wrote:
The tariff estimate covers measures implemented between January 6 and May 13, 2025. These include a 30 percent levy on imports from China and Hong Kong, 25 percent duties on autos, auto parts, steel, and aluminum, a 10 percent general tariff on most other imports, and the elimination of duty-free treatment for low-value Chinese shipments.
CBO estimates that, before accounting for economic side effects, the new tariffs will reduce primary deficits by $2.5 trillion and cut interest payments by another $500 billion, for a total deficit reduction of $3.0 trillion. After factoring in modest economic drag — slightly lower GDP and temporarily higher inflation — the net deficit reduction is pegged at $2.8 trillion.
Commerce Secretary Howard Lutnick in November said that Trump is proposing a tariff dividend check so that Americans understand the impact of Trump’s tariff policies.
“Well, look, the President wants to make sure the American people understand that the tariffs are there for their benefit, right? That it’s — yes, it’s going to drive down our deficit. Yes, it’s going to make the country stronger,” Lutnick said on Fox Business Network’s Kudlow show.
“But he wants the people of America, the American people to appreciate these tariffs, and he knows if he puts money into their pocket and says, ‘Look, this was paid for by the tariffs,’ they’ll better understand how important this is for America. And so, that’s why he’s talking about it.”
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