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By eliminating personal income tax, the proposal indicates a move to bolster tariff collection from imports to fund government spending.
The Numbers Behind Tariffs as Income Tax Replacement
Current IRS data indicates that approximately $5.1 trillion was collected from income taxes in 2024. After accounting for tax refunds and credits, this deduction reduces the net revenue to around $4.5 trillion. The critical question then arises—can tariffs realistically substitute this substantial revenue?