๐จ BIG NEWS โ Could the U.S. ditch income tax entirely?
๐บ๐ธ Donald J. Trump says: โVery soon, Americans may NO LONGER pay income tax.โ Instead he suggests replacing personal income tax revenue with tariffs on imported goods.
๐ก What this could mean
โ No more tax withheld from paychecks โ meaning more take-home cash now.
๐ Shift from income-based taxation to trade/import-based taxation.
๐ Potential major shift in U.S. trade, economy & global supply-chain dynamics, if implemented.
โ ๏ธ Why experts โ and markets โ are skeptical
๐ Tariff revenue accounts for only a small fraction of U.S. federal revenue: in 2024-25, individual income taxes generated trillions, while tariffs made up only about 3.7 % of total federal revenue.
๐ To replace income tax revenue, tariffs would need to be so high that it could choke off imports โ undercutting the very revenue they depend on.
๐ธ Higher tariffs likely translate into higher prices for consumers (imported goods become more expensive). That could crowd out gains for ordinary households.
๐ Trade tensions โ tariffs risk provoking retaliation, hurting global trade, supply-chains, and possibly U.S. exports.
๐ง Why crypto / investors are watching
A tax-free paycheck era in the U.S. could increase consumer spending power โ potentially boosting demand for all kinds of assets, including crypto.
However, if tariffs push up inflation (via higher prices for goods), the economic instability could spook markets โ which might drive safe-haven flows into crypto or other speculative assets.
Shift in fiscal policy might reshape how investors view import-heavy corporations, trade-dependent sectors, and global supply-chain risk โ potentially creating volatility in equities, commodities, and crypto.
โ $GLM
