Source: Cobden Centre
by Benn Steil and Elisabeth Harding
“President Trump has many times suggested that tariff revenue could replace the federal income tax. This claim is absurdly off-base, since it is mathematically impossible for tariffs, even at current levels of imports, to generate the $2.4trn in revenue that would be necessary. Commerce Secretary Howard Lutnick, however, has said that the president only aspires to eliminate income tax for Americans earning less than $150k. Could tariffs cover that? As shown in the figure above, annual tariff revenue from the current effective Trump tariff rate of 28% would — assuming that imports stayed constant — amount to $838bn more than that collected in 2024, under Joe Biden. But the constant-imports assumption is clearly ludicrous, as imports are bound to shift away from China.” (04/29/25)
https://www.cobdencentre.org/2025/04/the-economics-of-trumps-tariffs-vs-income-tax/