on May 5, 2025, 9:53 am
https://newrepublic.com/article/194821/trump-tariffs-income-tax-innumeracy
Far too little attention is paid to one of Donald Trump’s chief claims, which he makes constantly: He fervently believes, or sure seems to, that the revenue from tariffs will be so great as to allow for the shutting down of the IRS and the end of income taxes.
Permit me to arm you with the answers to three fundamental questions. How much does the federal government spend every year? How much revenue does the federal government take in every year? And how much revenue might Trump’s tariffs generate once his plan is really up and running?
Answers to the first two questions: In 2024, the government spent about $6.75 trillion. In the same year, federal government revenues totaled $4.9 trillion. Yes, that made for a hefty budget deficit of $1.8 trillion, give or take, and that is certainly on the very high side, but that isn’t what we’re here to discuss today.
Now—let’s break down that revenue figure into its constituent categories. The largest chunk of that $4.9 trillion, about $2.4 trillion—or essentially half—came from income taxes. Another $1.7 trillion came from payroll taxes. About $530 billion came from corporate taxes (which Trump wants to lower again, so don’t expect that number to stay that high). Finally, $253 billion came from our old friend “Other.” The largest piece of the “Other” pie was excise taxes ($101 billion), which are taxes on things like airline tickets and so forth. “Other” also included the aforementioned $77 billion in tariff revenue, also known as customs duties.
In other words: To vaporize the IRS, Trump’s tariffs would need to produce $2.4 trillion in revenue. So, how’s that looking?
It’s looking insane is how it’s looking. As noted, the government is on pace to generate something north of $200 billion in tariff revenue this year. But let’s imagine that Trump’s wildest dreams are met or even exceeded. Will customs duties produce anywhere near $2.4 trillion?
No. Not even close. As in, nowhere near. He's an idiot.
-greenman
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