Can Tariffs Really Replace US Income Tax? (Uncut) 05-01-2025

$4 Trillion Tax Hole: Can Tariffs Really Replace US Income Tax?

What if you never had to pay income tax again? We’re seeking permanent income tax cuts all across the board. I’m talking zero. No April 15th, nothing.

Mississippi becoming the 10th state in the nation to eliminate income tax. It might sound impossible, but President Trump is once again doubling down on his proposal, a full-blown income tax elimination replaced with something we haven’t relied on in over 100 years, tariffs. And those tariffs were already causing major industries to sound the alarm.

But as pressure to scale back tariffs grows and the economic slowdown accelerates, the question still remains, could this actually work? Or would it explode the deficit and destroy the value of the dollar through inflation? Because the truth is, income tax makes up nearly half of all federal revenue. So if President Trump’s plan is to cut it, we need to ask, what gets cut? Who pays for it? And what impact will this have on the U.S. debt, the economy, and most importantly, your savings? Let’s get into it. In case you missed it, President Trump reaffirmed that he is planning to eliminate all income tax for Americans, replacing that revenue with tariffs.

If possible, we’ll do a complete tax cut because I think the tariffs will be enough to cut all of the income tax. And while most people, myself included, would love to get rid of income tax, the question still remains, how realistic is this plan? Now, proponents of this idea are quick to say, well, we didn’t always have income tax, which is true. If you think about it, the American Revolution literally started over taxation.

Colonists rebelled against unfair financial control. They felt as though they were subjects under control rather than citizens with rights. Which is funny because while things are different today, I would argue that many people share that sentiment, which makes me wonder, why aren’t more people upset about income tax or protesting in the street against taxation or the Federal Reserve devaluing our dollar without a single vote cast by us about it? Tell me your theory.

What do you think in the comments below? See, the modern income tax, as we know it today, wasn’t created until 1913, the same year that the Federal Reserve was created. With the passing of the 16th Amendment prior to that, the government relied mainly on tariffs and excise taxes. But here’s the key difference.

Back then, the government was small. No Social Security, no Medicare, no $36 trillion in debt and counting, which brings us to the gold standard. Of course, they couldn’t spend the way they spend today.

They could only spend what they had. Go figure, what a novel concept. Today, the system is massive.

And while many would argue that it should be much smaller, it does still provide support, defense, and infrastructure, many things that Americans rely on. So while it’s easy to say, let’s get rid of taxes, it becomes harder to rally against taxation without risking what many would consider essential services, which brings us to tariffs. Is there this new option that would allow us to cut income tax without losing the revenue that provides these essential services? Let’s look at the numbers together with no spin.

And what I mean by that is there’s a lot of different ways you can calculate the math. I’m going to start by assuming that no one has to pay income tax. Income tax accounts for half of all total revenue, or roughly $2.5 trillion.

When you add on Medicare and Social Security, that’s another $1.3. So all in, you’re looking at roughly $4 trillion to make sure that everyone’s paycheck is fully their paycheck. Now, President Trump’s plan is simple, replace 100% of that with revenue from tariffs, which sounds great in theory, make China and others pay, bring back jobs, but it’s just not that simple. See, last year, tariffs accounted for under $100 billion worth of revenue.

Now, there is a positive though, because annually we import about $4 trillion worth of goods, meaning there’s $4 trillion worth of goods that could have tariffs slapped on them. But the tariffs would have to be far, far higher, higher than they even are today. See, last year, the effective tariff rate was 2.5%. Today, it’s 22%.

If you look at a $4 trillion gap that we have to film, there’s $4 trillion of goods being imported. We would need at least 100% tariffs that would be quadruple what we have today. But even then, that would only work if you are not accounting for any loss.

Because realistically, if we’re quadrupling tariffs from where they are today, we’re going to see a significant slowdown in the amount of imported goods, meaning those tariffs would have to climb even higher. That’s a tough pill to swallow, but I promised you no spin. So there is another scenario that could potentially work here that’s much more realistic.

And that would be if it wasn’t eliminating income tax for everyone, but eliminating income tax only for those making under X amount of dollars. Let’s say everyone making less than $200,000 would not have to pay income tax. Now we’re looking more like $600 billion that we need to account for.

And these numbers suddenly become much more realistic with the current tariffs in place. But part of the reason that people can’t give you a straight answer on this is because it’s just not that simple. Let me ask you another question.

What is the whole point of tariffs? Why are we doing this? To bring jobs back to the United States, right? To create manufacturing opportunities here in America. Let’s say that that’s successful. Then what happens? Well, suddenly we wouldn’t be importing as many goods, right? Because we’d producing them here at home, meaning now we have less goods to tariff and tax, meaning that we have revenue.

But I know someone out there is going to call me out and say, okay, Taylor, I hear you, but this could take years, if not decades for what you’re talking about to come to fruition, which is true. I agree. It’s not going to happen overnight.

And in the meantime, of course, I would love to not be paying income tax. But for me, this whole tariff and tax debate has unveiled something much larger, much deeper. The truth that this entire financial machine is built on unsustainable debt, debt that needs to keep growing because if growth slows down, then the machine stops running.

And we’re already seeing signs of it. Just yesterday, the Q1 GDP numbers came in declining negative 3% when economists were expecting positive growth. But that’s not all.

Early payroll reports for April also show 62,000 new jobs created, far lower than any expectation as companies brace for uncertainty and slow their hiring down, which is important to understand because here’s the part that no one’s talking about, replacing income tax with tariff revenue. That’s only one part of the equation. The other part, the deficit, which is at $2 trillion annually and projected to keep growing.

So even if we could pull off replacing income tax with tariff revenue, what about the deficit? It’s still there. It’s growing. Meaning, sure, you’ve stopped paying income tax, which is great, but don’t think that you’re not being taxed.

It’s still there. It’s just hidden on every dollar you spend while inflation eats away at your savings. Because let’s not forget, we’re not starting from a solid foundation.

We are starting from underneath a mountain of debt where social security is already underfunded. And we have a trillion dollars of interest payments annually just to service our debt. Meaning that unless we got essential services, we’re not solving anything.

Sure, you get to take home more pay, but that pay is worth substantially less. It’s like swapping out the tires on a car that’s already running off of a cliff. Now, someone out there, I know it already is going to say, I still would rather take home my full paycheck and deal with inflation, which I totally understand, but that only makes sense if you have limited inflation.

Let’s consider what would happen in a severe economic slowdown, which at this point isn’t hard to picture. It’s already happening. But I am talking about a serious crisis, one where unemployment would go through the roof and government funding would be needed to come in and save the day.

But when you’re already running a $2 trillion annual deficit, where does that funding come from? More government printing, costing the American people, costing you more, but it gets worse. How do we fund more printing? By issuing more debt. Who buys the debt? Foreign countries.

And what’s happening right now with foreign buyers? They are offloading their U.S. Treasuries. Demand is drying up. What happens when demand dries up? It means that we have to offer higher rates to make that debt more favorable at a higher expense to the United States government, which in turn means a higher expense to you and I. This is the debt cycle we’re in.

This is how the currency life cycle dies. This vicious cycle leading to inflation, more inflation, rapid inflation, which turns into hyperinflation, at which point your dollars are devalued or revalued for pennies on the dollar, a fraction of what they were worth, at which point it’s no longer even about how much you’ve saved or how hard you’re working. Quality of life as we know it today would change drastically.

This has been decades in the making. And unfortunately, we are now reaching the end of this currency life cycle. I’m not blaming one person because it’s been a lot of people and a lot of decisions that have gotten us here.

And I also don’t fault anyone for trying something different and trying something new to make things better. But when I take emotion out of it, because I am a realist and I look at the numbers, I don’t see how we’re going to dig ourselves out of this hole, especially with eliminating income tax along the way. And if we do, I just hope people out there are prepared, not just for a short term pay gain, but for a long term decline in the dollar’s value, because that is where we’re headed.

I’m sorry to be the one to have to say it, but your dollar is never going to be worth more than what it’s worth today, which is why I personally make sure that I am protected outside of the dollar, because I don’t want to sit around and wait and find out and see my savings and my retirement decline in value when I could have done something earlier to protect myself against this system, against the end of this currency lifecycle where we’re headed. Listen, I hate taxes, but you know what I hate more than taxes I can see? I hate taxes that I can’t see. Hidden taxes, hidden taxes on my wealth through intentional inflation that benefits the wealthy elite and those in the know and hurts everyday Americans.

That’s what really makes me mad. Sorry to get worked up. It just really gets to me.

I know the next question everyone always asks is, what can we do to protect ourselves? And you already know if you’ve been watching for a while, I talk about physical gold and silver being your wealth protection shield outside of the system, your insurance policy. If you want to learn more about how you can protect yourself with gold and silver, we have created a free gold and silver guide, the ITM gold and silver guide, which you can download today. It only takes a couple of seconds.

It’s free. Do it before you forget. You can click the link below in the description, or you can scan the QR code to get your copy today.

And as always, if you’d like to learn more about how we can help you, how we’ve helped so many other people create a strategy and get prepared for what’s coming next, you can call us at the number below. You can click the link and set up account only at a time that works best for you to talk to one of our expert analysts who have decades of experience in helping people just like you prepare for what’s coming next. And in the meantime, I so appreciate you being here.

Thank you so much. I’m Taylor Kenny with ITM Trading, your trusted source for all things gold, silver and lifelong wealth protection. Until next time.