By Jack Phillips
President Donald Trump on Tuesday provided his most direct endorsement yet that he believes his tariff policies would generate enough revenue to abolish federal income taxes.
Trump told reporters in a Cabinet meeting that “at some point in the not too distant future you won’t even have income tax to pay” due to revenue produced by his administration’s tariffs.
“Whether you get rid of it or just keep it around for fun or have it really low, much lower than it is now, but you won’t be paying income tax,” Trump said.
The president did not elaborate on the details of eliminating income taxes for Americans, including whether there would be an income limit.
Earlier in the Cabinet meeting, the president stated that the government is “going to be giving back refunds out of the tariffs because we’re taking in literally trillions of dollars” and asserted that the national debt will also be reduced.
Trump’s remarks on Tuesday aren’t the first time he’s suggested abolishing income tax. Last week, Trump told military members that he would move toward ending income taxes.
“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. Could be almost completely cutting it because the money we’re taking in is going to be so large,” the president said on Nov. 27.
And while on the campaign trail in 2024, Trump mentioned the prospect of eliminating federal income taxes during an interview with podcaster Joe Rogan. When Rogan asked whether he was serious, Trump responded: “Yeah, sure, why not?” He then said that tariffs would cover the cost of lost tax revenue.
In a March interview with CBS News, Commerce Secretary Howard Lutnick stated that the Trump administration is seeking to eliminate income taxes for individuals who earn less than $150,000 per year.
“I know what his goal is: No tax, for anybody who makes less than $150,000 a year. That’s his goal. That’s what I’m working for,” Lutnick said at the time.
The president’s comments on Tuesday were made days after he predicted that tariff revenues would skyrocket to new records, saying that businesses had largely depleted an inventory buildup of imported goods prior to his tariffs and would now have to import goods at higher rates.
His comments on Truth Social appeared to be aimed partly at the Supreme Court, where justices recently heard arguments on the legality of tariffs Trump imposed under an emergency law. Several lower courts have ruled that the emergency law was applied illegally, prompting the administration to appeal to the highest court.
“I look so much forward to the United States Supreme Court’s decision on this urgent and time sensitive matter so that we can continue, in an uninterrupted manner to, MAKE AMERICA GREAT AGAIN!” Trump wrote on the platform in late November.
Also in November, the Congressional Budget Office said that recent tariff reductions brought about by U.S. trade deals with partner economies had caused the agency to cut its estimate for how much Trump’s tariffs would reduce U.S. budget deficits over the next decade by 25 percent to $3 trillion, including interest costs, from the $4 trillion the agency projected in August.
During Tuesday’s meeting, Trump reiterated that he wants to send $2,000 tariff dividend payments to certain Americans next year and stressed that it will be possible to pay off the national debt. Some Republicans have appeared to be cool on the tariff dividend payment in recent interviews.
Reuters contributed to this report.
