As Election Day nears, former President Donald Trump has once again stirred up political debate, this time by hinting at the potential elimination of federal income taxes. In a recent town hall segment held at a Bronx barbershop and broadcast on Fox News, Trump shared a bold idea: reviving a system where tariffs and other revenue sources could replace federal income taxes altogether.
The discussion unfolded as Trump took questions from the barbershop’s owner, employees, and patrons, many of whom were concerned about over-taxation and its impact on future generations. One attendee voiced his fear that his children might never achieve the American dream due to what he described as “oppressive over-taxation.” He asked Trump whether, given the potential economic benefits of reopening the Keystone Pipeline and implementing tariffs, the United States could one day eliminate federal income taxes.
Trump’s answer was both emphatic and optimistic: “There is a way.”
He elaborated, recalling a time in American history when the country operated without federal income taxes. “In the 1890s, we didn’t have income taxes, and we had so much money that the government didn’t know how to spend it all. They even had to set up blue-ribbon committees to figure it out,” Trump said. He continued, “We could get back to something like that if my plan works.”
The idea Trump alluded to would rely on generating revenue through other means, such as tariffs on foreign imports and energy production from projects like the Keystone Pipeline. He indicated that the surplus revenue from these initiatives could eventually help the country pay off its debt and, once financially stable, eliminate the need for federal income taxes.
Trump has already advocated for significant tax changes, including abolishing federal income taxes on tips, overtime pay, and Social Security income. While the details of his broader tax overhaul remain vague, the prospect of eliminating federal income taxes is part of his larger vision for a more robust, self-sufficient American economy.
The United States has had a complicated relationship with federal income taxes. The country first introduced a temporary income tax of 3-5% from 1862 to 1872 to help pay for the Civil War. After its repeal, the government largely relied on tariffs, taxes on alcohol, and tobacco for revenue. However, in 1913, the 16th Amendment to the Constitution established the federal income tax system as we know it today.
For many years, tariffs were a significant source of government income. From 1868 to 1913, about 90% of federal revenue came from taxes on liquor, beer, wine, and tobacco, along with tariffs. However, this revenue model gradually shifted. By World War II, the United States had fully embraced a mass-based income tax system to fund its growing federal government and war efforts.
Today, federal income taxes are the backbone of government revenue, accounting for 94% of it, while tariffs contribute just 2%. The idea of shifting back to a tariff-based revenue system, as Trump suggests, would mark a massive reversal of more than a century of tax policy.
W. Elliot Brownlee, a historian of tax policy at the University of California, Santa Barbara, explained in an interview with the New York Times that income taxes became deeply entrenched in American society during World War II. Since then, they have funded an ever-expanding array of government programs, from military spending to social services.
For Trump’s vision to come to fruition, significant changes to both domestic and international economic policies would be required. Ramping up tariffs could bring in additional revenue, but it could also trigger trade disputes, higher consumer prices, and potential retaliation from trade partners. The reopening of the Keystone Pipeline and other energy projects would be key to boosting domestic revenue, but these initiatives face numerous political and environmental challenges.
Critics of Trump’s plan argue that eliminating federal income taxes could severely limit the government’s ability to fund essential services. Programs like Social Security, Medicare, infrastructure development, and military spending rely heavily on the current tax system. Without income tax revenue, the government would need to find alternative ways to finance these vital programs, which could prove to be both logistically and politically difficult.
Still, Trump’s supporters see the plan as a refreshing approach to economic freedom, reducing the tax burden on individuals and businesses and fostering a climate of growth and prosperity. In their view, moving away from federal income taxes could unleash economic potential, returning America to its former financial glory.
Trump’s comments have undoubtedly sparked conversation and debate, particularly as he continues to campaign for a potential return to the White House. Whether his tax plan could ever become a reality remains to be seen, but the prospect of such a radical overhaul is certain to energize his base and draw attention in the lead-up to the 2024 election.
As with many of Trump’s proposals, the details remain unclear, but the broader vision is unmistakably bold. While some see it as a return to fiscal conservatism, others see it as an unworkable fantasy. Either way, Trump’s plan to possibly eliminate federal income taxes will continue to be a key talking point as voters decide whether he should be given another chance to reshape the American economy.
