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2 days ago
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ARTICLE AD BOX
Summary
Donald Trump used his State of the Union speech to pitch tariff revenues as a way to eliminate income tax in the US. This would result in regressive taxation. For America’s sake, it’s an idea whose time should never come.
US President Donald Trump’s State of the Union address this week was quite predictable. His claim that this was “the golden age of America,” for example, was par for the course, given his excesses of rhetoric on fuzzy matters like greatness.
What stood out was his defiance over his tariff policy just days after America’s apex court struck down his ‘reciprocal tariffs’. The president also chose to air a hope he’d expressed earlier: that tariff revenue would eventually replace the US system of federal income tax.
Whether or not the fiscal math allows it, it must not be taken seriously. Import levies are effectively a tax on domestic consumption. This makes it a regressive tax, since a rich consumer bears the same burden as a hard-up buyer of the same item.
For taxation to be fair, it needs to be progressive. Higher rates must be borne by those who are better off. Direct taxes on income do this, but indirect levies don’t.
Hence, filling coffers with tariffs instead of income tax would not just be inequitable, it would amount to the US turning its back on a long-held ideal—of the “American dream” being accessible to everyone. Import duty mop-ups replacing income tax is an idea whose time should never come.
English (US) ·