In this article we are going to tackle a recent idea Donald Trump mentioned: the possibility for Americans to stop paying federal income tax. Not everybody understands this issue quite well because of terms like taxes, tariffs, and Congress decisions. This is why we have decided to explain it in very simple terms, since it’s a very important thing to know for every American citizen. So, let’s get started!
No more federal income tax
Trump surprised many people when he said that he believes, in the near future, American citizens could stop paying federal income tax. He explained this after a cabinet meeting, telling reporters that the revenue the government is collecting is “so great, so enormous” that income tax may no longer be needed.
Tariffs are taxes on products that come from other countries, which, for Trump, are generating so much money that it could reduce or even remove the federal income tax. According to Trump, this could mean Americans won’t pay the federal income tax or they would pay way less.
Brief history of the federal income tax
The federal income tax has existed since 1013 after the 16th Amendment was approved. This amendment gave Congress the legal power to collect taxes on people’s income. Ever since then, income tax has been one of the main ways the U.S. government gets the money it needs to operate.
In 2025, according to the U.S. Treasury, individual income taxes were the government’s main source of revenue. This means that income tax is extremely important to how the country currently functions.
Trump talking about refund connected to tariffs
Trump also mentioned that the next tax season should be “the largest tax refund season ever.” He said that these refunds would come from the tariffs the government has collected. This suggests that Trump sees tariffs not only as a replacement for income tax but also as a source of money that could go back to Americans in the form of refunds.
This is not the first time Trump talks about removing or reducing federal income tax, in the past he mentioned the idea of removing this tax for people earning less than $1,500 per year. He also said he believes income tax could be greatly reduced or possibly removed over the next few years because the tariff revenue is growing.
What’s more, Trump added that the U.S. must stop “taxing our citizens to enrich foreign nations” and instead should “tariff and tax foreign nations to enrich our citizens.” He shared this belief earlier in January, according to Fox Business.
Can income tax really be removed?
Even though Trump mentions this idea as a possibility, removing the federal income tax wouldn’t be that easy. To make it happen, the Congress would have to pass new laws that allow removing current laws, which is difficult because Republicans have only a very small majority. The midterm elections in 2026 could change who is in control of Congress. The article even mentions that Representative Marjorie Taylor Greene’s resignation creates more uncertainty about Republican control.
If federal income tax were removed, the U.S. would need another big source of income and Trump believes that source could be tariffs, which have brought in almost $215 billion in revenue.
However, economist Dean Baker disagrees strongly. He says it is impossible for tariff money to replace income tax money because income tax brings in around $2,600 billion, while tariffs only bring in about $215 billion. Baker calls the idea “absurd on its face.” He says that replacing income tax with tariffs would cause the U.S. deficit to rise by about $2,300 billion each year, pushing the total deficit to around $4 trillion. He warns this could cause inflation, problems with the dollar, and even financial panic. Baker also says he is sure that none of Trump’s economic advisers would support this type of plan.
Other possible uses of tariff money
Trump has also talked about using tariff money to send $2,000 stimulus checks to Americans. However, it’s not very clear if this will happen. He said in November that the government would be “issuing dividends” sometime next year, but these payments would also need Congress’s approval.
So, what do you think about Trump’s bold idea?