In a move that could significantly reshape the United States’ trade and fiscal policies, former President Donald Trump has proposed eliminating income tax and replacing it with an ‘all tariff policy.’ The proposal, discussed during a private meeting with Republican lawmakers, aims to leverage tariffs as a primary tool for generating revenue and influencing negotiations. Trump, who utilized tariffs as a key component of his foreign policy during his initial presidency, is considering a broader protectionist trade approach if elected in the 2024 presidential election.
The proposal has garnered swift reactions from both supporters and critics. Critics, such as New York University professor David Kamin, argue that the substitution of tariffs for income tax would disproportionately impact lower- and middle-income Americans, favoring wealthier individuals. Catherine Rampell of The Washington Post similarly highlighted potential concerns regarding fairness and the distributional impact of the policy.
Trump’s visit to Capitol Hill marked his first return to the area since January 6, 2021, when, as president, he encouraged his supporters to rally at the U.S. Capitol in protest of his electoral defeat to President Joe Biden. The proposed ‘all tariff policy’ is expected to be a central topic of discussion in the upcoming 2024 presidential election, with its potential implications for the U.S. economy and trade relations drawing considerable attention from both political and economic analysts.
