Research shows that Donald Trump's plan to replace income taxes with tariffs could lead to significant savings for Americans.
Potential Savings for Americans
According to research by Dancing Numbers, transitioning to a tariff-based tax system could save the average American from $134,809 to $325,561 over a lifetime, especially residents of high-tax states like New Jersey, New York, and Massachusetts.
Impact on Markets and Prices
Tax cuts typically boost asset prices as investors direct their savings into the markets. Tariffs could offset potential price rises due to trade wars.
Historical Perspective and Future Plans
Donald Trump recalled that the US once relied on tariffs for wealth before permanent income taxes. In January 2025, Howard Lutnick, confirmed as commerce secretary, supported replacing the IRS with an external revenue service.
If Trump's plan is implemented, it could lead to significant changes in the US tax system and economy, potentially reducing financial burdens on citizens.
