Income tax may be abolished in America, Donald Trump hints amid tariff war
Let us tell you that any change in income tax can be made only through the US Congress, because it has the right to make tax policy.
US President Donald Trump claimed in an interview on Tuesday that the US can earn so much revenue from its new tariff policy that it can eliminate the need for income tax. Citing the late 1800s, he said that at that time the US earned money only through tariffs and the country was the richest nation in the world. He said, “This is an opportunity to bring in so much money that it can replace the income tax. From 1870 to 1913, we had money only from tariffs. And then we were the richest country in the world.”
Let us tell you that any change in income tax can be made only through the US Congress, because it has the right to make tax policy. Trump said that he is working towards removing taxes on tips and social security using the money earned from tariffs and fulfilling his other election promises.
Trump claimed that a committee was formed in the 1880s whose job was to decide how to end this money, who to give it to, and what to do with it. He said, “In 1913, they cleverly implemented the income tax system. Then in 1931-32, they tried to bring back the tariff, but it was too late. People blame the tariff for the Great Depression, whereas the depression had already come.”
Billions of dollars earned daily from tariffs
Responding to a question on revenue, Trump said that the US had earned two to three billion dollars daily during his tenure. He said, “We have never earned so much money. It is a matter of hundreds of billions of dollars annually.” Trump said, “Recently I have stopped it for a while, because it is a transition. You have to show some flexibility.”
On Wednesday, Trump put a 90-day ban on customized tariffs imposed on many countries, which is considered a big U-turn from his earlier statement. Earlier he had said that there would be no concession on tariffs, only negotiations would take place.
Trump’s statement is being considered important in the context of American electoral politics and global trade policy. While on the one hand it reflects his America First strategy, the idea of completely replacing the tax system with tariffs can be controversial and economically challenging.
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