No Income Tax? Breaking Down Trump’s Big Proposal

US President Trump proposed nearly eliminating income tax, arguing that the massive revenue generated from tariffs would make it possible to implement substantial tax cuts in the coming years.

“Over the next couple of years, I think we'll substantially be cutting and maybe cutting out completely… Could be almost completely cutting it because the money we're taking in is going to be so large," Reuters quoted Trump telling US military service members on Thursday. He did not, however, provide specific details about how he plans to achieve this near-elimination of income tax.

This isn’t the first time Trump has made such claims. In April, he wrote on Truth Social that the imposition of tariffs would lead to a significant reduction — or even complete elimination—of income tax, especially for Americans earning less than $200,000 a year.

Upon returning to the White House earlier this year, Trump announced a sweeping tariff regime on trading partners, imposing taxes ranging from 10% to 50% on most US imports depending on country of origin. He insisted that these tariffs would boost government revenue and push consumers toward American-made products.

The President, who has consistently defended imposing hefty tariffs, recently floated the idea of a tariff dividend for Americans. He criticised opponents of tariffs and pledged to deliver at least $2,000 per person, excluding high-income individuals.

On Truth Social, Trump wrote: “People that are against Tariffs are FOOLS! We are now the Richest, Most Respected Country In the World, With Almost No Inflation, and A Record Stock Market Price. 401k’s are Highest EVER.”

He went on to say the US is bringing in “Trillions of Dollars” and would soon begin reducing its $37 trillion debt, adding that record investment, new plants, and factories are emerging across the country. As part of this prosperity, he promised “a dividend of at least $2000 a person (not including high income people!)” for everyone.