President Donald Trump signaled Tuesday that the federal income tax system may face a dramatic overhaul in the coming years, telling his cabinet that soaring tariff revenue is reshaping the government’s financial picture and could soon make traditional income taxes unnecessary.
During a cabinet meeting at the White House, Trump said tariff collections have grown far beyond what experts projected, noting that the money pouring into the Treasury has placed the United States in a position to return more dollars directly to taxpayers. The President also confirmed that another round of tariff refund checks is on the table, saying the government now has “levels of tariff revenue that nobody believed possible.”
Trump told his cabinet that this shift could eventually pave the way for the complete elimination of federal income taxes.
“Over the next two, three, four years, those numbers are going to go up,” Trump said. “The money we are taking in is so great, it is so enormous,” Trump said to the press. “In the not-too-distant future, you will not even have income tax to pay, because the money we are taking in is so great, it is so enormous.”
“Whether you get rid of it or just keep it around for fun or have it really low, much lower than it is now, but you will not be paying income tax. We are taking in numbers that are so great, you are not going to have income tax to pay,” Trump said.
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The comment reignited one of Trump’s longest-running economic ambitions. Throughout both his first presidency and his current term, he has repeatedly floated the idea of replacing federal income taxes with tariff revenue, arguing that foreign nations should carry more of the financial burden through trade rather than American workers.
Trump said tariff intake has expanded so rapidly that it is now capable of covering expenses that previously relied on income tax revenue. The President also used the meeting to confirm that he will announce his nominee for the next Federal Reserve Chair in early 2026.
The discussion comes as the administration continues rolling out the economic blueprint Trump promised on the 2024 campaign trail. That plan centered heavily on tariffs, industrial reshoring, deregulation, and what Trump calls a “worker first” approach to rebuilding the middle class.
If income taxes are eventually eliminated or significantly reduced, it would mark one of the most dramatic shifts in federal revenue policy in modern history. Trump told his cabinet the goal is simple: put more money in the pockets of American workers while shifting the financial burden onto foreign competitors.
The federal income tax has been part of American life for just over a century. It began in 1913 after the Sixteenth Amendment allowed the government to tax personal income. Before that, Washington relied mostly on tariffs and excise taxes to fund operations.
Since its creation, presidents and lawmakers have repeatedly debated scaling it back or replacing it entirely. In the 1980s, President Ronald Reagan pushed major reforms that dramatically lowered rates, arguing that a simpler system would boost growth. In the 1990s and early 2000s, Republicans floated versions of a national sales tax or a flat tax to end the IRS’s reliance on income reporting.
None of those proposals ever reached full implementation, mostly because Congress could not agree on a replacement that kept federal revenue stable. Trump’s new comments mark one of the most serious modern pushes to revisit the idea, built on the argument that tariff revenue is now strong enough to take on a much larger share of the federal burden.
If successful, it would represent the biggest tax shift since 1913.
