Trump will scrap federal income tax and abolish IRS, ally suggests
Source: The Times
President Trump’s commerce secretary has suggested that the administration could scrap federal income taxes.
Howard Lutnick, who was confirmed in his role on Wednesday, said the White House’s goal was to abolish the Internal Revenue Service (IRS) and instead rely on Treasury coffers being filled by tariffs collected from other countries.
In 2024 the US federal government collected $4.92 trillion. The biggest source of revenue — about 49 per cent — was from individual income taxes.
“Think about it, Donald Trump announces the External Revenue Service, and his goal is very simple … his goal is to abolish the Internal Revenue Service and let all the outsiders pay,” Lutnick told Fox News.
-snip-
Read more: https://www.thetimes.com/us/american-politics/article/trump-to-abolish-irs-layoffs-6vzzpfffh
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Henry203
(343 posts)and that is why we have an income tax.
brush
(58,866 posts)even though I won't owe I don't need the hassle, or paying my accountant.
Jerry2144
(2,707 posts)Much more money circulation. Taxes help control the excess money. But as long as the fascists see taxes as government theft instead of the price of admission to civilization, they will keep pushing crap like this. And it will be hard to fix.
Wicked Blue
(7,611 posts)lapfog_1
(30,542 posts)a very regressive form of taxation
Billionaires would pay the SAME tax ( not same tax rate, but same amount of dollars ) by buying imported goods ( like food ) as everyone else.
Say goodbye to almost everything we import... winter fruits and vegetables, many specialty items, coffee, bananas, etc.
Cheap electronics and appliances... gone.
competition for domestic car companies... gone.
of course we will buy some American made goods... without the huge tariff. But that will take years to develop. Meantime, nobody will buy our stuff so... welcome to the great depression.
kelly1mm
(5,617 posts)price would be about 17 cents bringing the total up to about 75 cents a pound. Why would bananas be going away at that cost? Same with coffee. The made at home per cup cost would go from 30 cents to 38 cents. Not cutting out coffee if it goes up 8 cents a cup.
lapfog_1
(30,542 posts)and you put off buying that new flat screen or imported car ( like, say, an imported electric car from China ).
But you are right, you are still buying coffee and bananas. But that ain't funding the non-discretionary parts of the federal budget. Social Security, military, and Medicare. ( Medicaid will be gone, not to mention most of the other functions of the government ). But those three programs ( which, right now, take around 70% of the budget )... so who said it would ONLY be a 25% tariff? I didn't say that. And the more people stop buying any imports, the greater the tariff has to be on the remaining items we cannot do without.
Ben Stein, while a complete right wing asshole, was a pretty smart guy... I used to play along at home against him in "Win Ben Stein's Money" game show... he beat me more often than I beat him.
Now go rent Ferris Buellers Day Off... and listen to the LESSON in high school history that Ben Stein actually taught on tariffs and the Laffer curve and the origins of the Great Depression. Apparently the high school students in real life were as bored as the students looked acting in the movie... because those are now the idiots feeding Trump this bullshit.
Here, I'll save you the streaming rental fee.
VMA131Marine
(4,846 posts)Imported that’s the issue. If everything costs 25% more, you can buy 20% less stuff for the same money. Not such a big issue if you have plenty of disposable income at the end of the month, but if you live paycheck to paycheck the total amount you can buy will decrease.
Now you might say that people will have more money if they don’t pay income taxes, and that’s true. But if you’re making less than the median income and probably substantially more than that, your federal tax rate is much less than 25% so you will still lose out and be able to buy less. So that’s well more than 50% of the population who will be able to buy less stuff. That will probably mean few people buying things like bananas as they try to figure out what things are essential and what they can do without.
kelly1mm
(5,617 posts)and insurance, only food has some (relatively small) possibly foreign sourced products. Vehicles I will concede as being a significant increase in cost buy as we are semi retired we by one vehicle every 10 years or so.. While I have not done a dollar by dollar tabulation of my monthly budget/spending, I estimate less that 15% is from outside the US because, like I said my (and I would presume most americans) expenditures are not sourced from outside of the USA.
Miguelito Loveless
(4,813 posts)First off, tariffs on things like oil, steel and aluminum affect everyone. Oil affects all food goods because that's how they get to the store. Steel & aluminum effect the price of canned goods and repair parts for cars, HVAC, construction, etc..
Also, what Trump is talking about is not just tariffs, but a national sales tax, or a value added tax (VAT). Last time I saw someone do the numbers in my econ class (so a while back), that would mean a 23% tax on ALL goods.
DENVERPOPS
(10,888 posts)They have wanted to install a VAT tax for a long time, which IS WAY BEYOND REGRESSIVE by a huge amount.
The rich will pay an insignificant part of their income on purchases, and we all will pay the VAT tax on a big percent of our incomes.
Other countries have it and it works, but they ALL have free health care, free or ultra cheap meds, free college education etc, in return.
We won't get anything, but a barely liveable wage, and "barely existing" subsistence..............
The car market is already on the skids because no one can afford a new car, kids can't buy houses and can barely afford the outrageous rents, utility bills have soared out of sight, groceries have suffered from a 20-30% increase over the past 2-3 years for smaller quantities, gas prices are still high, vegetable prices have soared, etc etc etc etc.
And if you go to a fast food outlet, the size of everything has shrunk by a third, and it is three times as expensive as the original sized items....
slightlv
(4,837 posts)there are a hell of a lot of knock on effects, tho. The 25% tax on vehicles doesn't stop there. Insurance will go up. I've already paid a high premium because of the last round of tariffs on Canada's lumber. 25% added on top of that and people are going to stop being able to afford house insurance. Plus, there are a tons of "little things" (and some not so little) that go into making any one item. All of which are taxed at 25%. The aggregate is overwhelming to people living paycheck to paycheck or on a fixed income.
We truly are a country where only the rich have the means to live here. Unfortunately, there's no refuge for us, the common people.
tulipsandroses
(6,754 posts)A whole lot of folks have built businesses on those platforms - buying wholesale from China or India. These days, consumers can bypass those middlemen and buy directly from Chinese sites like Temu and Shein. TEMU does about 9 billion dollars yearly in US Sales.
Wiz Imp
(3,751 posts)But this doesn't count the cost of imported materials used in goods manufactured in the US. U.S. manufacturers are more than 30 percent dependent on imports.
Miguelito Loveless
(4,813 posts)Which is what a national sales tax is.
kelly1mm
(5,617 posts)Miguelito Loveless
(4,813 posts)of an income that allows you that discretion.
Wiz Imp
(3,751 posts)And any taxes which are paid by consumers (like tariffs) are incredibly regressive. The people at the bottom of the income scale would pay far more of their income than the rich. You think income inequality is bad now? You ain't seen nothing compared to how it would be with taxes being all tariffs or sales tax or VAT or anything like that.
bucolic_frolic
(48,728 posts)thesquanderer
(12,488 posts)
Bayard
(24,275 posts)
markodochartaigh
(2,281 posts)cannot reason a person out of a position he did not reason himself into in the first place.
Jonathan Swift
slightlv
(4,837 posts)who are denying it now. But it's going to be a realization that comes too slowly to matter, IMO. We're all going to suffer while waiting for magats to wise up to how a country's economy works. This isn't kitchen table stuff we're talking here; they can't seem to move their chairs away from the table, tho.
rampartd
(1,596 posts)this would be a fairly regressive tax, with plenty of ways for importers and business owners to game the system.
FakeNoose
(36,628 posts)The big-box stores and the Amazon-type online retailers will have plenty of ways to avoid paying Uncle Sam - BUT they won't hesitate to mark all their prices up 25% anyway. Who is going to keep them honest? There will be no IRS to enforce the tariffs.
Lovie777
(16,755 posts)Miguelito Loveless
(4,813 posts)slightlv
(4,837 posts)will be right there to buy things up for pennies on the dollar. The rich get richer; the poor get poorer... until we die off completely.
William Seger
(11,392 posts)We are so fucked.
delisen
(6,782 posts)It is a plan to crush poor and middle class. We will have no human rights and will be paying all the costs of supporting the billionaires and big business and military defense.
neohippie
(1,199 posts)Another half baked idea, but if there is no income taxes what happens when businesses can no longer write off expenses?
I don't see any of this cutting our deficit and that would also spark a global trade war that will create economic chaos as well as push other countries away from wanting to trade with us
Also Musk hasn't found enough fraud or waste to make up for lost revenue
twodogsbarking
(12,740 posts)None of it good.
dweller
(25,676 posts)demolish birthright citizenship, now he wants to destroy the 16th amendment to the Constitution ?
not gonna happen Pisswig …
✌🏻
livetohike
(23,263 posts)that. It all sounds like heaven to them. It’s almost unbelievable that people could be that stupid.
no_hypocrisy
(50,232 posts)He doesn't understand taxes, tariffs, and consumerism.
If the tariffs are more or less universal, it doesn't matter if I buy domestic or imported. I'm going to pay maybe 25+ percent more on just about everything. My cost of living is going up, up, up. But my salary won't. And I won't rely on credit to pay the bills as much. I just will severely cut back on what I buy. And I won't be the only one.
Not only will the American economy contract from consumer anemia, but business won't be getting their profits from folks like me who aren't buying goods and services like they used to. Sure, tariffs will be collected, but there will be less demand and thus, less tariffs collected. And with less revenue, there will be a notable contraction in funding federal programs, agencies, salaries, etc. And federal assets will need to be sold, for example, national parks and wildlife preserves.
It doesn't matter that TSF understands any of this. Those around him do and they're salivating at what the future holds.
milestogo
(19,465 posts)So he really is no expert, as his series of business failures shows.
Xolodno
(6,859 posts)Very easy to do back then, for the right amount of money.
Native
(6,925 posts)ashredux
(2,703 posts)The tariff is paid buy the importer in America and he passes them on to the American people
Kid Berwyn
(19,192 posts)Almost wish my Party had thought of using them to rewrite the Constitution.
WestMichRad
(2,040 posts)
surfered
(5,046 posts)
valleyrogue
(1,680 posts)58Sunliner
(5,226 posts)LiberalArkie
(17,375 posts)a widget is sold at a 30% markup.
Import cost was $1.00 and they sold it for $1.30
Import cost $1.00 - Tariff of 25% is 1.25 to the dock with 30% markup is now $1.65.
If my math is correct..
appmanga
(1,020 posts)And excise taxes are regressive. Any bad idea that comes down the pike, this asshat will go for.
Ohioboy
(3,588 posts)...and Canada, and China, and every other country we trade with?
Xolodno
(6,859 posts)Because his supporters probably got by with a "D" in their High School Econ class. If they even had to take it.
But in reality, its a national sales tax. This has been proposed a few times by GOP politicians who ran for President, Forbes, Herman Cain, etc. It always got shot down. So someone there figured a way to rebrand and get the stupid's to think we are taxing other nations.
bluedigger
(17,196 posts)Worst idea since the Constitutional amendment for a balanced budget.
Nasruddin
(961 posts)He will demand countries pay him tribute, like the Persian King of Kings.
Ole Nasruddin knows this rodeo - the camel smuggling business is going to go ballistic!
sakabatou
(44,000 posts)Evolve Dammit
(20,067 posts)et tu
(1,951 posts)valleyrogue
(1,680 posts)Lutnick is an idiot or a liar or both. Trump can't do either.
The bum Trump doesn't understand the IRS merely collects taxes and goes after cheats.
Maybe that is why he thinks he can abolish it.
Ol Janx Spirit
(34 posts)...to make every American either too stupid or not paying enough attention to get really exited over the prospect of not paying any income taxes. We are a country that the overriding message of eliminating the income tax will get a ton of support--never mind the fact that the average American just gives the government their money to invest and gets it back come tax time; and will benefit more from Social Security than they put in for basically the same reason. Which raises a question: if income tax is eliminated, how exactly will Social Security be calculated? I'm going to guess that the answer is: it won't--not for anyone that hasn't paid into it after the date of the enactment. Putting that aside: tariffs are normally used as an incentive to either protect or to bring production of a certain good back to a country. But this tariff-as-a-replacement-for-income-tax idea depends on that not happening. The incentive would be to actually increase imports to pay the tariffs. The more domestic jobs produced, the less income the government gets to pay for the services all Americans demand. This perverse incentive is extremely regressive: the lower income brackets do not benefit from the job creation aspect of tariffs, but they pay more for everything--as pointed out before: effectively a national sales tax. But as I said: many--if not most--Americans will only hear, "no more income tax," and see anyone pushing back as an obstacle to their tax freedom. Sure, reality will hit back, but at what cost? I fear this is just another well-crafted message to drive a wedge between the fantasy and the reality of the American democratic experiment. And clearly the America we live in currently loves a fantasy.
iemanja
(55,568 posts)Rather they are paid by the company or person buying the imported goods. Am I wrong?
wishstar
(5,601 posts)so US Treasury gets the tariffs. But if US customers buy less because of the increase costs of products, the rosy estimates of revenue from tariffs are inaccurate plus when other countries retaliate and stop buying our products and our farmers or businesses suffer, we end up bailing out our businesses losing tax revenue and our economy suffers.
erodriguez
(814 posts)He knows that this plan would destroy the average american. But it would be great for billionaires like him.
DFW
(57,221 posts)A billionaire is nowhere if he can't invest, protect, or spend his money. If there's nothing left to buy in the USA, then he had better take a long position in rubles or gold. Josef Göbbels gave a rousing speech to thunderous applause in Berlin in February, 1943, asking his adoring audience, "Wollt Ihr den totalen Krieg?" (Do your want all out war?) The crowd went wild, and rose to its feet with deafening cheering. Two years and three months later, Göbbels and his family were corpses in Berlin as a result of his "totaler Krieg." If Trump and his cabinet get everything they want in this rapid internet age, I doubt it would take anywhere near that long for Putin or any other of his puppet masters to insure that he and his cronies met a similar fate.
Oh, and maybe someone should remind Howard and his pals that the income tax is the domain of Treasury, not Commerce. Also, each state already has the right and power to levy its own sales tax. They don't need the Federal Government to do it for them. Besides, if he is no dummy, he has to have seen that a Value Added Tax is nothing but Government Heroin. Addictive as all hell. Once you get started, you find it never meets your needs, you need ever-increasing doses, and it's still never enough. It gives a temporary financial high, but it wears off, and you always find yourself needing more. Thank goodness the USA never started down that road--and no wonder Republicans hope we do.
JohnnyRingo
(19,668 posts)Sounds to me like state and county taxes will soar. Raise property taxes or close down schools, parks, and fire departments.
Tell me again why people still have signs in their yards.
Roy Rolling
(7,262 posts)Who is the someone else who will pay for the U.S. Government to operate?
Why would a business in any country pay for the U.S. Government to operate, especially the current MAGA version of the U.S. Government. it says it on the package: Buy this product because it makes the seller better, fuck the customer.
It’s easy to see why ETTD and how he bankrupted six companies—he’s a fucking moron.
Trust_Reality
(2,054 posts)I would think that because of high unemployment, circulation of money would slow dramatically. So prices would actually fall due to lack of demand. Years ago, I asked my father what the great depression was like. He said everything was cheap, but that didn't matter because no one had any money. My grandparents lost their small town (very small town) grocery store. I remember seeing photos of investors jumping out of tall buildings when the stock market crashed in 1929.
I would expect to see lots of bare store shelves. I will be looking for things I can donate to local second hand stores.
Will unemployment compensation "save" most individuals and families? I'm not sure where that money would come from. Someone above mentioned state and local taxes would probably need to be very high.
I know there are quite a few safeguards in place now that did not exist in 1929 and the following years. But Trump apparently intends to destroy all of the government systems that would implement them. Or, will Musk's AI run everything?
Or, maybe God will intervene on behalf of the heathens who tried to keep this from happening.
rpannier
(24,637 posts)
Kablooie
(18,840 posts)At the expense of domestic production.
Straw Man
(6,839 posts)... is not enough to fund our government at current levels. So even a 100% tariff on imported goods would fall short of the necessary cash, and would destroy our entire economy to boot.
Wiz Imp
(3,751 posts)DallasNE
(7,690 posts)Since it only applies to imports, it would have to be very high, which would mean shortages as imports are priced out of the market. Can you imagine a 100% tariff on a new Toyota, already priced at $35,000. But it would only apply to certain Toyota's because some are already built here. But many parts are imported and those parts would be subject to the tariff tas. People that are currently not paying any Income Tax will now be paying thousands in tariff taxes.
Can you really abolish the IRS? Who collects the payroll taxes. He has said nothing about replacing the payroll taxes.
This would be extremely disruptive in addition to being extremely regressive, putting more money in the pockets of the billionaires. I sure want to see the numbers for both before and after impacts before signing off on such a plan. I expect the numbers will not add up.
Figarosmom
(4,499 posts)Last edited Fri Feb 21, 2025, 03:38 AM - Edit history (1)
Cover their paychecks? Much less all their other obligations. Or are we headed for a national sales tax? Is that why one of his campaign promises was to not tax Social Security, because a sales tax would be a tax on everybody. Kids. Seniors everyone that is not paying any now would be.
Layzeebeaver
(1,904 posts)Who could have guessed it? 
LymphocyteLover
(7,337 posts)And he sure as fuck can't do this unilaterally, without congress, although he will try.
DFW
(57,221 posts)I think a big question will be when it comes down to if Roberts and Phony Carrot think it's OK to allow Trumpusk to amend the Constitution at will (or ignore it with impunity, which is the same thing).
If that's the case, then it's game over.
Wiz Imp
(3,751 posts)The IRS and taxes are part of the Department of Treasury. Department of Commerce has nothing to do with it.