Radical Tax Reform ? Trump Wants To End The IRS

The idea of an income tax has long been a pillar of the tax policy in the United States. However, Donald Trump intends to challenge this model and proposes to completely replace it with an import tax system. A study conducted by Dancing Numbers claims that this project could generate significant savings for Americans, amounting to $134,809 per individual, and up to $325,561 by eliminating other levies on earned income. But this proposal, if it were to materialize, would not come without consequences, both for consumers and the overall economy. Between promises of increased purchasing power and risks of trade tensions, this tax reform is already a topic of debate.

A revolutionary tax system based on tariffs

Donald Trump advocates a return to the roots of public financing and wishes to entirely eliminate the federal income tax in favor of an increased taxation on imports . The president justified his project and recalls that “the United States was the richest nation in the world at the beginning of the 20th century, and we protected our workers with tariffs,” a statement that resonated during his appearance on the Joe Rogan Experience. For Trump, the current system penalizes households and favors an inefficient bureaucracy embodied by the Internal Revenue Service (IRS), which he proposes to replace with an “External Revenue Service” tasked with collecting taxes on imported goods.

This project would not be limited to a simple change in the fiscal paradigm. Before the total elimination of the income tax, a “DOGE Dividend” (an immediate tax reduction of 20%) would be applied to offset the transition effect. This first phase, according to Dancing Numbers, would particularly benefit residents of New York, New Jersey, Connecticut, Illinois, and Massachusetts, where the tax burden has historically been higher. The stated goal is to revive consumption and attract capital to financial markets, where the savings generated could be invested.

Between economic opportunities and protectionist threats

While the idea of a zero tax may attract many voters, it also raises concerns. Higher tariffs could impact the price of imported products, which could directly affect consumers. Indeed, increased taxation on goods from abroad could lead to a widespread rise in prices and reduce the purchasing power of households. The Secretary of Commerce, Howard Lutnick, however, dismissed these concerns and declared : “politicians do not know how to manage money. They only keep taking more. We need to rethink our tax system to protect our economy.”

Furthermore, this reform could rekindle trade tensions with key partners, particularly China and the European Union, which could respond by imposing their own tariff barriers on American products. Such a trade war could have unpredictable consequences for the global economy, especially during periods of financial market volatility. The elimination of the IRS and the establishment of a new tax collection system also pose major structural challenges, raising uncertainty about the feasibility and effectiveness of such a disruption.

The ambition of Donald Trump to eliminate the income tax in favor of tariffs is a proposal as bold as it is risky. While the tax gains for citizens are evident on paper, the side effects could be severe: soaring prices, trade tensions, and budget uncertainties. In this context, one question remains: are Americans ready to sacrifice economic stability for an immediate alleviation of their tax burden? As elections approach, the debate is more open than ever.