The thought of never seeing another federal income tax taken out of your paycheck is exciting to lots of people. Former President Donald Trump has talked about scrapping the whole federal income tax system and replacing it with tariffs on imports. This has led to a ton of buzz, arguments, and head-scratching. So how likely is it, really? What would it mean for your take-home pay and the money the federal government collects? In this post, we’ll explain the main tax ideas Trump has floated, clarify what the “One Big Beautiful Bill” tax proposal is, and show why tax experts say the income tax probably isn’t going anywhere soon.
Trump has a history of bold promises on taxes. Here are a few of the standout ideas he has put out there:
Some of the talk around tariff-based plans sounds earth-shaking, still, Congress hasn’t actually passed a law that does all of this. Basically, the main idea is to switch from taxing Americans’ wages to taxing imports; the pitch is that Americans keep more of their paychecks. But looking at the numbers raises a lot of tough questions.
So, is it really possible to fund the government with tariffs alone? The federal income tax, the source we’re talking about, brings in roughly $3trillion each year. At the same time, the U.S. buys nearly the same amount of goods and services from overseas. If tariffs are supposed to take the place of that income, they would have to pull in the entire $3 trillion, which means tariffs would have to hover around 100% on all goods. That means that the sticker price of anything that comes from a ship, plane, or truck would effectively double. Some experts think we’d need rates that actually hit 200% to really cover the shortfall.
Right now, the average tariff is already at around 22.8%—the highest it’s been in decades. If Congress were to crank those rates to anywhere from 100% to 200%, the cost of everyday stuff would explode. Clothing, small electronics, and kitchen gadgets would all start coming with shockingly higher price tags, and the heaviest burden would hit middle- and lower-income families. Professors at trade think tanks are saying that the net effect would actually end up being a more unequal system than the current income tax, because this idea taxes people the same way on the price of goods they have to buy, regardless of how much they earn.
When Trump signed the One Big Beautiful Bill tax proposal in July 2025, a lot of folks thought the bill would finally wipe out income taxes, one of his big campaign slogans. But the new law didn’t do that at all.
Here's what it did do:
These tweaks will give a little extra money back, especially to working families and retirees, but the law does not replace income tax. The tax system, in its core form, is still standing.
Trump often promises big, eye-catching moves, but the final policies usually aim lower. A headline like "No More Income Tax" sounds great, but the facts are unclear. Income taxes still bring in nearly half of all federal revenues. In 2024, for instance, the income tax sent the Treasury about $2.2 trillion, a big number that shows the tax system is not going anywhere anytime soon.
Trump income tax elimination is not an easy task—here's why.
The experts doubt it. The United States would have to rewrite the entire tax structure, maybe even tweak the Constitution, and still line up a reliable new revenue stream. While tariffs could bring in some cash now, new domestic factories—key to the former president's “America First” pitch—would bring in less money as imports drop.
Is the former president about to make income tax a thing of the past? The short answer is “no.” The law that was trumpeted as “one big beautiful bill” tax proposal delivers some tax deductions and credits, but the underlying income-tax framework is very much intact.
Replacing income tax with tariffs may sound great on paper, but it ignores some harsh economic facts. If you really dig into it, running a whole country on tariffs alone would hurt shoppers and send the whole economy into a tailspin. For the time being, the income tax stays the main way the federal government gets its funding, so it’s smart to plan ahead.
Stay informed about major tax changes and how they affect your finances — contact Watter CPA today for expert guidance and personalized tax planning!
