Trump Proposes Major Tax Cuts Fueled by Tariff Revenues

President Donald Trump announced that federal income taxes could be substantially reduced—or even eliminated—for Americans earning under $200,000, once his new tariff regime is fully implemented.

Trump outlined his vision on Truth Social, suggesting that the United States could move away from the traditional Internal Revenue Service (IRS) model toward an "External Revenue Service," funded largely by tariffs. The plan includes a 10% universal tariff on all imported goods, with higher rates targeting countries with significant trade deficits with the U.S.

The initiative, formalized through Executive Order 14257 earlier this month, marks what Trump called "Liberation Day," aiming to boost domestic manufacturing and reduce reliance on foreign imports. Commerce Secretary Howard Lutnick projects the tariffs could generate up to $700 billion annually—enough to slash the national deficit and lower interest rates.

While the plan promises tax relief for millions of Americans, economists caution it could lead to higher consumer prices and widened economic inequality. Nonetheless, Trump's bold proposal signals a dramatic shift in U.S. economic policy heading into the next phase of his administration.Thanks for reading and please research on CheckDot 🤝