Washington: Riding on the host of executive orders and decisions that were part of his poll promises, US President Donald Trump has made another big statement, proposing scrapping income tax for Americans to boost disposable income for people and families.
He described the proposal as a step forward in restoring America to the “system that made us richer”. To implement the complete abolition of income tax—a major contributor to federal revenue—Trump renewed his call for sweeping import tariffs.
“It’s time for the United States to return to the system that made us wealthier and more powerful than ever before. Instead of taxing our citizens to enrich foreign nations, we should tax foreign nations to enrich our citizens,” the US President stated during the House Republican Members Conference on Monday when he outlined his tax reform plans.
Trump cited the period from 1870 to 1913, when the US operated under a tariff-based economic system, as the wealthiest era in the nation’s history. He emphasised that import tariffs generated “enormous” revenue during that time.
Advocating for comprehensive tax cuts, the Republican leader proposed using import tariffs to offset the revenue gap created by the reductions. Trump reiterated this plan during his inaugural address and announced the creation of a specialised body to oversee import tariff management.
“Instead of taxing our citizens to enrich other countries, we will impose tariffs and taxes on foreign nations to benefit our own citizens. To achieve this, we are creating the External Revenue Service to manage the collection of tariffs, duties, and revenues. This will result in massive amounts of money flowing into our treasury from foreign sources,” Trump declared during his inaugural address on January 20.
The US President announced that the country would immediately begin overhauling the trade system to “protect American workers and families.”
However, some economists have warned that Trump’s plans for tariffs and tax cuts could create inflationary pressures and keep interest rates high. His proposals have also faced resistance from members of Congress, who have expressed concerns about rising deficits and potential challenges in implementation.
