Trump Proposes ‘All-Tariff’ Federal Revenue

Trump floated the idea of an all-tariff federal revenue system, large enough to replace the income tax, during a morning session with the House GOP, according to a GOP lawmaker in attendance.

The presumptive GOP presidential nominee has consistently supported higher tariffs as a way to protect domestic industries. He has long backed income-tax cuts, including extensions of the ones he signed in 2017. An all-tariff approach would combine the two stances and take them to the extreme, reversing more than 100 years of economic policy that encourages free trade and requires higher-income households to pay higher tax rates than the middle class. Such a return to 19th-century fiscal policy could amount to a tax cut for high-income people and, effectively, a tax increase on consumers, who would pay tariffs passed along to them in prices.

Trump also brought up a proposal he recently aired in Nevada—to eliminate taxes on workers’ tips. That could create a gap in the income tax and encourage more requests for tips. Rep. Tom Cole (R., Okla.), who chairs the powerful House Appropriations Committee, said he liked the idea because tips could be considered more like gifts than income.