Donald Trump proposes radical changes to the US tax policy by replacing the federal income tax with an import tariff system. This proposal has sparked lively debates.
A Revolutionary Tax System Based on Tariffs
Trump proposes to completely eliminate federal income tax and instead increase import taxation. He argues that the US was the wealthiest nation at the beginning of the 20th century through protecting workers with tariffs. He plans to replace the IRS with an 'External Revenue Service' responsible for collecting taxes on imported goods. Before fully eliminating the income tax, a 'DOGE Dividend' — a tax reduction of 20% — is proposed to ease the transition.
Between Economic Opportunities and Protectionist Threats
The idea of zero tax attracts many voters, but it also raises concerns about higher prices for imported goods and reduced purchasing power of households. Commerce Secretary Howard Lutnick noted the need to rethink the tax system to protect the economy. Introducing tariffs could reignite trade tensions with key partners like China and the EU. Significant structural challenges exist in creating a new tax collection system.
Conclusions and Reflections
Trump's ambition to eliminate income tax in favor of tariffs is both bold and risky. While potential tax benefits are evident, side effects could include rising prices, trade disputes, and budget uncertainties. The question is whether Americans are willing to sacrifice economic stability for immediate tax relief. As elections approach, the debate is more open than ever.
Trump's plans for a tax system overhaul prompt discussions about their economic viability and potential consequences. The question remains: is the public ready for such changes?
