Economy Trump's April 2nd Tariffs

[Seano]

Generate enough revenue to eliminate income tax from what exactly...? tariffs?

Isn't it obvious that this will never work?

Either the tariff is so high that it stops trade between countries completely, or it's so low that the revenues generated are nowhere near what the gov't makes from income tax.

None of this answers what I asked.

Trump has floated the idea of no income tax for folks making under 200k, these people make up a relatively small portion of tax revenue. I said, "if all worlds align" meaning if all went perfectly as Trump envisions.

 

[Last Samurai]

None of this answers what I asked.

Trump has floated the idea of no income tax for folks making under 200k, these people make up a relatively small portion of tax revenue. I said, "if all worlds align" meaning if all went perfectly as Trump envisions.

Sure if money grew on trees, things would be great.

 

[Seano]

Sure if money grew on trees, things would be great.

I asked a specific question, if you don't have an answer to it, thats fine but move on.

 

[Neph]

So lets say all worlds align and Trump can generate enough revenue to eliminate income tax.

How is it not better for the economy for the consumers to have more money to spend in our country?

I get what you're saying that people generally are irresponsible with extra money but if its extra money being spent, ins't that going to stimulate the overall economy of the US?

Tariffs are a regressive tax ,and income taxes are (in theory, but with loopholes maybe not) a progressive tax. Swapping a progressive for a regressive tax is widely considered unfair. Tariffs also reward inefficiency and so reduce a countries overall wealth: businesses and markets that couldn't otherwise survive on their own will survive with tariffs, which is paid for by the tariffs.

None of this answers what I asked.

Trump has floated the idea of no income tax for folks making under 200k, these people make up a relatively small portion of tax revenue. I said, "if all worlds align" meaning if all went perfectly as Trump envisions.

This is a much more interesting idea and out of my payscale. A 10% tariff is not too dissimilar to a federal sales tax. If they eliminated or reduced income tax below a fixed amount it would look much like a progressive system. There'd be a few things required for it to work:

• The in/out needs to add up (obviously)
• The tariffs would need to be predictable on a long term basis

10% tariffs aren't going to sink anyone's economy, especially not the US. Wildly gyrating tariffs from 0% to 170% to 50% to whatever-is-announced-on-social-media-the-next-day will. People can't trust, and can't transact, under those circumstances. They can if the figure is stable.

With all of that said, a 10% tariff isn't doing sweet fuck all for manufacturing in the US. I don't think it's terribly plausible; that kind of massive change is monumental in scope and not the kind of thing that will work if gestated in an afternoon nap. It's a big, big change that'd need a lot of input by experts, and I'm afraid the current administration doesn't appear terribly interested in experts.

TLDR: Not as insane as it sounds, but still a huge idea that'd need a lot of expert opinions.

 

[Seano]

Tariffs are a regressive tax ,and income taxes are (in theory, but with loopholes maybe not) a progressive tax. Swapping a progressive for a regressive tax is widely considered unfair. Tariffs also reward inefficiency and so reduce a countries overall wealth: businesses and markets that couldn't otherwise survive on their own will survive with tariffs, which is paid for by the tariffs.



This is a much more interesting idea and out of my payscale. A 10% tariff is not too dissimilar to a federal sales tax. If they eliminated or reduced income tax below a fixed amount it would look much like a progressive system. There'd be a few things required for it to work:

• The in/out needs to add up (obviously)
• The tariffs would need to be predictable on a long term basis

10% tariffs aren't going to sink anyone's economy, especially not the US. Wildly gyrating tariffs from 0% to 170% to 50% to whatever-is-announced-on-social-media-the-next-day will. People can't trust, and can't transact, under those circumstances. They can if the figure is stable.

With all of that said, a 10% tariff isn't doing sweet fuck all for manufacturing in the US. I don't think it's terribly plausible; that kind of massive change is monumental in scope and not the kind of thing that will work if gestated in an afternoon nap. It's a big, big change that'd need a lot of input by experts, and I'm afraid the current administration doesn't appear terribly interested in experts.

See, I thought the general consensus was the the lower classes are overtaxed compared to the upper classes. What could be better than eliminating income tax for those with the least? You'd have your upper classes still paying the bulk of US income tax and you'd just be replacing the lower class income tax with tariff revenue, which would likely be revenue coming from those who have the money to spend anyway. If I looked at my family, that'd be around an extra 1000 a month in my paychecks.

Again, I'm saying this is if all things went perfectly according to Trumps plan. Not necessarily that I see this actually happening. My question is a "What if?".

 

[Neph]

See, I thought the general consensus was the the lower classes are overtaxed compared to the upper classes. What could be better than eliminating income tax for those with the least? You'd have your upper classes still paying the bulk of US income tax and you'd just be replacing the lower class income tax with tariff revenue, which would likely be revenue coming from those who have the money to spend anyway. If I looked at my family, that'd be around an extra 1000 a month in my paychecks.

Again, I'm saying this is if all things went perfectly according to Trumps plan. Not necessarily that I see this actually happening. My question is a "What if?".

It's not a bad what if. In fact, it's a what-if that has precedence, since most nations already do something similar.

What is being compared is a consumption tax vs an income tax. Most other countries have a consumption tax (or Value-Add Tax aka VAT) already; in Australia, it's called the GST (or "Goods and Services Tax") and it's 10%.

The literature tends to suggest that consumption taxes have less negative economic effects than income taxs.

How Taxing Consumption Would Improve Long-Term Opportunity and Well-Being for Families and Children

Income taxes impose steeper economic costs, and often steeper administrative and compliance costs, than consumption taxes. Moving to a consumption tax would end the tax bias against saving and investment and provide an opportunity to greatly simplify anti-poverty programs embedded in the tax code.

taxfoundation.org

The numbers aren't going to add up to a situation where there can be a total replacement, but shifting the balance further towards consumption and away from income is generally considered economically sensible. Doing so in the form of tariffs does bear additional costs as noted earlier (it props up uncompetitive markets), so that may not be the best idea.

To summarise: I think people who yell NO should let the idea sit around for a bit longer as its not such an outrageous idea and exists already in most other countries.

 

[pinger]

Gosh, we'd better cave to China immediately over cheap plastic toys.

I see you stocked up on some cheap Chinese Strawmen before Temu started to get the Chyna tax

 

[BlankaPresident]

So lets say all worlds align and Trump can generate enough revenue to eliminate income tax.

How is it not better for the economy for the consumers to have more money to spend in our country?

I get what you're saying that people generally are irresponsible with extra money but if its extra money being spent, ins't that going to stimulate the overall economy of the US?

Extra money to spend in extra-extra expensive stuff.

 

[Last Samurai]

I asked a specific question, if you don't have an answer to it, thats fine but move on.

Fine, I'll explain why tariffs cannot replace income tax in the 21st century.

150 years ago this was possible because high tariffs were commonplace. The traders couldn't make more money by selling their goods somewhere else because those other markets also had high tariffs.

In today's world, if one country increases tariffs to the point where they are disproportionately high compared to other countries, the traders will simply take their goods elsewhere. Why? Because that way they make more money.

 

[BFoe]

So lets say all worlds align and Trump can generate enough revenue to eliminate income tax.

How is it not better for the economy for the consumers to have more money to spend in our country?

I get what you're saying that people generally are irresponsible with extra money but if its extra money being spent, ins't that going to stimulate the overall economy of the US?

I don’t think the worlds can align. I’d love to see a detailed breakdown (from economists, I mean) but he very short answer is that income tax generates far more revenue than tariffs. In other words, the tariffs would have to be insanely high to make up that much revenue.

Having that extra money in our pockets won’t mean much because we won’t be able to afford things, and the things we have the options to buy will be greatly reduced because trade will be so greatly harmed.

 

[Neph]

Fine, I'll explain why tariffs cannot replace income tax in the 21st century.

150 years ago this was possible because high tariffs were commonplace. The traders couldn't make more money by selling their goods somewhere else because those other markets also had high tariffs.

In today's world, if one country increases tariffs to the point where they are disproportionately high compared to other countries, the traders will simply take their goods elsewhere. Why? Because that way they make more money.

It can't replace, but it can take circa $360 billion out of it. The US imports approx $3.6 trillion, and 10% of that is $360 billion. Now, there's going to be some drop in imports due to the extra price, but a 10% tariff is not world changing.

If whatever the tariff money is instead returned to low income earners, there's a genuine argument to be made that it's not a terrible idea. I would be wary about the people who are especially low income and don't pay income tax at all; those would be stung without compensation in a scheme like this. But on the face of it, it can provide some rebalance between a consumption tax and an income tax, which is not a radical idea at all and exists in most countries already.

 

[wlu.29]

"MAGA is not primarily about policy effectiveness—it’s about identity, emotion, and belonging. Trump embodies a defiant, nostalgic vision of America that resonates deeply with people who feel left behind, silenced, or mocked by modern liberal society. Even in the face of poor economic performance or divisiveness, he gives voice to their frustrations and a target for their anger."

Where is this quote from?

 

[Last Samurai]

It can't replace, but it can take circa $360 billion out of it. The US imports approx $3.6 trillion, and 10% of that is $360 billion. Now, there's going to be some drop in imports due to the extra price, but a 10% tariff is not world changing.

If whatever the tariff money is instead returned to low income earners, there's a genuine argument to be made that it's not a terrible idea. I would be wary about the people who are especially low income and don't pay income tax at all; those would be stung without compensation in a scheme like this. But on the face of it, it can provide some rebalance between a consumption tax and an income tax, which is not a radical idea at all and exists in most countries already.

Last year income tax was $1.14 trillion

$360 billion in tariffs amounts to ~32% of that

(and that's assuming the amount of imported goods remains the same - which it won't, for reasons I already explained)

 

[Neph]

Last year income tax was $1.14 trillion

$360 billion in tariffs amounts to ~32% of that

(and that's assuming the amount of imported goods remains the same - which it won't, for reasons I already explained)

I think the number is even higher than that, this source quotes 2021 as having $2.2 trillion in income tax:

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

(they provide their own sources, feel free to correct me if they are wrong).

They also provide a table showing the distribution of those collections:

Table 1. Summary of Federal Income Tax Data, Tax Year 2021​

I've highlighted two figures in red; the total paid (2.2 trillion) and the total paid for the top 25% of earners (1.9 trillion). That means the bottom 75% are paying the difference (300 billion).

Therefore, if ~$360 billion is raised in tariffs, the bottom 75% of all income earners in the US would not have to pay income tax, since the funds would be covered by the tariffs (aka consumption tax).

 

[PEB]

Trump on possible toy shortage: "Maybe the children will have two dolls instead of 30"​

President Trump appeared to acknowledge Wednesday that toy shortages are possible as his tariff hikes ripple through the economy.

The CEOs of Walmart, Target and Home Depot privately warned him last week about the likelihood of product shortages and price spikes.

Driving the news: "Somebody said, 'oh, the shelves are gonna be open,'" Trump told reporters Wednesday. "Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more."

https://www.axios.com/2025/04/30/trump-china-tariffs-toy-shortage-christmas-2025

look at the orange buffoon trying to downplay the damage that he will be doing to his own people. you pay more and you get less so i can get rich is his theme and the chuds will be clapping like seals over it. so. much. winning.

maybe the peasants can just go buy less eggs and pay a few bucks more for them right? surely it will be worth it just as long as we get some mean tweets out of it.

EDIT

 

[Last Samurai]

I think the number is even higher than that, this source quotes 2021 as having $2.2 trillion in income tax:

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

(they provide their own sources, feel free to correct me if they are wrong).

They also provide a table showing the distribution of those collections:

Table 1. Summary of Federal Income Tax Data, Tax Year 2021​

I've highlighted two figures in red; the total paid (2.2 trillion) and the total paid for the top 25% of earners (1.9 trillion). That means the bottom 75% are paying the difference (300 billion).

Therefore, if ~$360 billion is raised in tariffs, the bottom 75% of all income earners in the US would not have to pay income tax, since the funds would be covered by the tariffs (aka consumption tax).

You're right, income tax is over $2 trillion per year

So $360 billion in tariffs actually represents ~16%

The total amounts are just not comparable at all

 

[lowlife]

Where is this quote from?

ChatGPT - Trump Tariffs Economic Impact

Shared via ChatGPT

chatgpt.com

the summary of a question I asked chat, take it for what it's worth but I wholeheartedly agree.

 

[Seano]

"MAGA is not primarily about policy effectiveness—it’s about identity, emotion, and belonging. Trump embodies a defiant, nostalgic vision of America that resonates deeply with people who feel left behind, silenced, or mocked by modern liberal society. Even in the face of poor economic performance or divisiveness, he gives voice to their frustrations and a target for their anger."

lol, what a load of bullshit.
Yeah, people tired of being broke and wishing they could afford a home etc- all nostalgia.

 

[lowlife]

lol, what a load of bullshit.
Yeah, people tired of being broke and wishing they could afford a home etc- all nostalgia.

I wouldn't expect anything less from you, carry on.

 

[AWilder]

lol, what a load of bullshit.
Yeah, people tired of being broke and wishing they could afford a home etc- all nostalgia.

lmao, yeah, massive layoffs of gov workers and looks like private industry is right around the corner because of trump's policies. those broke people will become poorer and further from owning a home due to trump and right wing policy. and any safety net that may have existed will be underfunded and undermined by trump and right wing policies.