• Former President Donald Trump has reiterated a proposal to "substantially cut or maybe cut out completely" federal income tax, citing tariff revenues as the funding mechanism.
  • Tax policy experts immediately questioned the plan's feasibility, with one analyst calling it "mathematically impossible" to replace roughly $2 trillion in annual income tax revenue with tariffs.
  • The proposal comes as the administration has already secured permanent status for key individual tax cuts from the 2017 Tax Cuts and Jobs Act.

In a Thanksgiving Day video call with U.S. military personnel, former President Donald Trump laid out an ambitious fiscal vision, stating his administration could eliminate federal income tax in the coming years. "I believe in the near future you won't have income tax to pay," he said, according to a recording of the call. The cornerstone of his proposal is the claim that the U.S. is "taking in hundreds of billions of dollars" from tariffs, revenues he suggests could replace the lost income tax receipts.

This is not a new idea for Trump, who has floated an "all tariff policy" in private meetings with Republican lawmakers and on the campaign trail. However, the latest comments have thrust the concept back into the spotlight, prompting a swift and skeptical response from budget analysts. Erica York, vice president of federal tax policy at the Tax Foundation, stated bluntly that replacing income tax with tariff gains is "mathematically impossible." The scale of the challenge is stark: federal income tax revenue for fiscal year 2024 is projected to be approximately $2.2 trillion, while total customs duties and tariffs have historically brought in less than $100 billion annually.

A more moderate interpretation of the policy goal was offered by U.S. Commerce Secretary Howard Lutnick in a recent interview. He suggested the target is to eliminate federal income taxes specifically for people earning less than $150,000 annually, though he did not tie this relief directly to tariff revenue. This narrower focus would still represent a massive fiscal shift requiring new revenue sources or spending cuts.

Legislatively, the concept finds some resonance in the FairTax Act of 2025 (H.R. 25), which was introduced in the House in January. The bill aims to repeal the income tax, abolish the IRS, and implement a national sales tax. Its prospects are uncertain, and it does not rely on tariffs as a funding mechanism. Meanwhile, the administration has already notched a significant tax policy victory. The recently passed One Big Beautiful Bill Act (OBBBA) made several provisions of the 2017 tax cuts permanent, locking in individual rates from 10% to 37% and significantly higher standard deductions.

For now, the grand proposal to scrap the income tax appears more aspirational than operational. Congressional approval would be required, and the math, as experts point out, presents a formidable obstacle. The administration has not released a detailed white paper or revenue projection to support the tariff-for-income-tax swap. When reached for comment, a spokesperson for the Trump campaign did not provide additional specifics on the timeline or mechanics beyond the former president's public statements.

Correction: An earlier version of this article misstated the projected federal income tax revenue for fiscal year 2024. The figure is approximately $2.2 trillion, not $2 trillion.