Is Trump Getting Rid of Income Tax

Introduction

Is President Donald Trump really planning to get rid of federal income tax? The thought of never sending another payment to the IRS has thrilled many and made others doubt the idea. Throughout his second term, Trump has hinted that quirky imports—basically, tariffs—might replace the entire income tax system and fund the federal budget instead.

But how close are we to waving bye-bye to the paycheck-stealing income tax? And what does that flashy One Big Beautiful Bill tax proposal (OBBB) passed earlier this year really promise? In this post, we break down the campaign buzz, eyeball the real numbers behind the idea of tariffs totally replacing income tax, and spill the beans about whether our future paycheck selfies will show zero deducted at the top.

Trump’s Public Tax Proposals

So, what has Trump said out loud about taxes? Here are the headline-grabbers:

• Income tax elimination for anyone bringing in $150,000 to $200,000 a year—maybe for a lot of folks below that, too.
• Free cheesy-tasting income tax on: Scenarios we don’t like to pay tax on anyway—like tips, overtime, and our precious Social Security checks.

Trump income tax elimination using import tariffs sounds enticing. He described it as “a complete tax cut” and said it would put more money in American pockets. But let’s be clear, no new law actually eliminates income tax. 

Trump’s plan relies on the idea that money raised from tariffs on foreign imports could replace income tax altogether. Experts say that idea faces giant hurdles, because:

• Federal income tax revenue: ~$3 trillion per year.
• Annual U.S. imports: ~$3 trillion.
• To generate $3 trillion from tariffs, rates would need to average 100% on all imports.
• Currently, the U.S. already has the highest tariffs in decades, the effective rate is 22.8%. That’s a big hit to families and to producers who need imported materials.

To replace income tax with tariffs entirely, some experts have calculated that tariffs would have to soar to 200%. That would mean imported goods could cost four times as much as they do today. Yes, that would push prices up everywhere and the biggest hit would fall on lower- and middle-class households. In other words, this idea could become far more unfair—more regressive—than the income tax system we have now, which is supposed to tax people based on what they can afford.

What “One Big Beautiful Bill” (OBBB) Actually Does

The One Big Beautiful Bill tax proposal, or OBBB, officially became law in July 2025, touting itself as a hallmark of President Trump’s second-term tax agenda. People assumed the name meant we would be kissing income taxes goodbye, but the truth is a lot more toned down.

Instead of scrapping the entire tax code, OBBB layers on adjustments to the framework already set up in the 2017 Tax Cuts and Jobs Act. That allows the law to give some taxpayers a break while leaving the overall income tax system in place and unchanged.

One of the biggest changes is a higher standard deduction. That means more of the average household’s income is shielded from taxes, and it even streamlines tax prep for folks who do not itemize. For middle and lower earners, less income is taxed, and they don’t need to dig through receipts or record-keeping, which makes the whole process a little less troublesome.

Besides extending lower brackets and boosting deductions, the proposed OBBB plan adds focused credits meant to help select groups, such as:

• A tip credit to assist service workers whose tip income makes up a large part of their earnings.
• A senior relief credit aimed at retirees fixed on set incomes.
• An expanded childcare credit to lift some of the burden from working families and help cover high childcare costs.

These ideas show a push to steer tax cuts toward workers and families, instead of handing out blanket breaks to every income level. Even so, all of these concepts are still on the drawing board and aren’t part of existing law. Even with Trump saying tariffs might someday replace income taxes, the One Big Bold Idea doesn’t give us steps toward that goal.

Proposals vs. Reality

Throughout his campaigns and speeches, Trump has proposed sweeping changes to the U.S. tax system. Some ideas sparked headlines and led some to think income taxes could disappear completely. Here are some of the headlines that keep getting recycled:

• Cut or wipe out the federal income tax, especially for Americans who earn less than a certain amount, such as $150,000 per year.
• Keep certain paycheck sources completely tax-free. Ongoing suggestions include tips for waitstaff, Social Security for seniors, and that extra overtime cash that seniors love.
• Get rid of the income tax entirely and replace the lost revenue with tariffs. The idea is to hit the overseas companies that sell us stuff, moving taxes off local workers and on to overseas firms and the shoppers who buy those goods.

Supporters claim proposals like this would create a fairer tax system that favors working people and retirees by focusing on what we consume rather than what we earn. The trouble is, proposals this bold keep circling the legislature and never clear the final vote.

Meanwhile, the truth is that income tax stays at the center of the federal tax system, making up close to 50% of total tax revenue. In 2024, income taxes alone brought the government roughly $2.2 trillion. The One Big Beautiful Bill tax proposal, passed and signed in July 2025, didn’t scrap income tax. Instead, it preserved the previous structure by locking in the temporary 2017 bracket, keeping higher standard deductions, and adding a handful of very targeted credits. Even with some relief, this is not a switch to avoiding income tax in favor of large tariffs.

Additional hurdles stand in the way of completely getting rid of income taxes:

• No Easy Votes: A total repeal of the federal income tax must move through Congress, and that faces uphill political fights and procedural hurdles that make a simple bill look like a 1,000 miles run.
• Finding the Cash: Washington needs substitute revenue to make up the more than $3 trillion it raises from income taxes every year, leaving lawmakers to hunt for replacement taxes that would not upset the budget.
• Economic Impact: If the U.S. leans too heavily on huge tariffs or a broad-based national consumption tax, the price we pay every day could climb sharply.

When you add it up, the risk isn’t just a sticker shock at the cash register. Key forecasts suggest inflation could resume, growth might stumble, and American companies may find themselves locked in ongoing disputes with overseas partners.

Could Income Tax End?

Analysts remain doubtful. To wipe out the income tax would:

• Demand a total rewrite of the American tax code.
• Almost certainly drive up prices, squeeze consumers, and leave U.S. goods less competitive abroad.
• Confront constitutional and political hurdles since any repeal would need a vote in Congress.
• And if tariffs manage to bring more manufacturing to American soil, another core goal of the Trump administration, imported goods would fall. That would shrink the income from tariffs, making the whole scheme wobbly.

Takeaway: the income tax isn’t going anywhere, even if Trump sells the idea as a long-range vision.

Conclusion

Is Trump eliminating income tax? The answer for today is no. Trump and some of his team may dream of a no-income-tax America someday, but right now the One Big Beautiful Bill keeps the income tax system we know, adding some new credits and tinkering at the edges.

Swapping out income tax for tariffs is a complex idea that runs into a bunch of math and economics headaches. Right now, Congress hasn’t put a bill on the table that takes us there, and not a single draft is circulating.

So the regular federal income tax is still here, and that’s how Americans should build their plans. To see how today’s tax laws and future proposals might sting or help you, a tax pro can give you the clearest picture.

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