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Trump’s Tariffs Could Save Americans Over $134K in Taxes
A recent report suggests that replacing income taxes with tariffs could result in significant tax savings for Americans. According to the research by Dancing Numbers, eliminating federal income taxes and relying on trade tariffs instead could lead to lifetime tax savings of at least $134,809 per person. If state wage-based income taxes are also removed, total lifetime savings could reach a staggering $325,561 per individual.
The report highlights that certain states would benefit the most from this shift, with residents of New Jersey, New York, Connecticut, Illinois, and Massachusetts facing the highest lifetime tax burdens and therefore seeing the largest reductions in tax payments under Trump’s tariffs.
In addition to these potential savings, Dancing Numbers also proposes a 20% “DOGE Dividend” tax refund as a precursor to a complete federal income tax repeal. This initial refund would provide an immediate tax cut before the transition to a tariff-based system.
It is essential to note that this proposal may have significant economic implications, including effects on asset prices and trade costs. Some experts suggest that lower income taxes could lead to increased consumer spending and market investment, while higher tariffs on imported goods could result in higher prices for certain products.
Moreover, the shift from income taxes to tariffs could influence international trade policies between the United States and its partners. Retaliatory tariffs from other nations could impact imports and exports, leading to changes in global trade dynamics.
Interestingly, this proposal has garnered support from some key figures, including Howard Lutnick, who was confirmed as Commerce Secretary in February 2025. In a recent statement, Lutnick echoed Trump’s proposal, suggesting that replacing the Internal Revenue Service (IRS) with an external revenue service could be a viable option. He emphasized the historical context of tariffs as a funding source for the U.S. government and criticized politicians’ inability to manage the country’s finances effectively.
In conclusion, it is crucial for lawmakers and economists to engage in a thorough discussion on this proposal, considering its potential consequences on various aspects of society.
