Donald Trump recently said that his administration could move to abolish federal income tax altogether, shifting instead to a tariff-based revenue system — meaning U.S. citizens would keep their full paychecks, no more filing, no more withholding.
He claims that rising tariff income from imports, combined with renewed domestic manufacturing, will yield enough revenue to replace current tax income.
The vision:
Workers take home 100% of wages (no income tax)
The government funds itself by taxing imports — shifting the burden away from paychecks and onto goods entering the country
Supposedly a win for American manufacturing and everyday spenders
✅ Why Some Supporters Are Excited
For traders or crypto‐backers — especially those drawn to volatility, disruption and systemic change — here’s what’s attractive:
More disposable income: Without income tax, more money remains in people’s pockets — potentially fueling consumer spending or speculative investments (like crypto).
Simplified system: No filing, no withholdings, fewer bureaucratic hassles — attractive for people who dislike current tax burdens or complexity.
Possible boost to domestic industries: If tariffs dissuade imports and encourage U.S. manufacturing — could reshape supply chains, disrupt global trade, and shift economic dynamics (which historically drive volatility and opportunities).
Many see this as a radical overhaul — something that could shake up the financial status quo, and possibly benefit risk-assets if inflation or currency moves follow.
⚠️ Reality Check — Experts Are Highly Skeptical
Economists and tax-policy analysts warn the math simply doesn’t add up:
In the last fiscal year, income taxes generated trillions in revenue for the U.S. federal government; tariffs — even under the new aggressive tariff regime — produce only a tiny fraction.
To replace the lost income-tax revenue solely with tariffs, the U.S. would need to raise tariffs to such astronomical levels (on all imports) that prices on goods would surge — likely causing inflation, harming consumers (especially lower-income households), and hurting demand.
Tariff revenues are volatile and unpredictable — unlike income tax, which is relatively stable and scalable with income levels. That unpredictability makes this an unstable foundation for funding essential government programs.
In short: many experts call the plan economically “not feasible.”
📈 What It Could Mean for HODLers / Risk-Asset Investors
If this kind of overhaul goes through (or markets genuinely believe it will), consumer spending might rise — which could feed speculative bubbles (in crypto, equities, commodities, etc.).
Volatility may increase: tariffs tend to distort trade, supply-chains, and costs — which can create unpredictable inflation or deflation, supply-shocks, and opportunity (and risk) for traders.
But: massive risk from inflation and economic instability — especially if tariffs drive prices up sharply. That could erode real gains (e.g. crypto holdings, savings).
Social and political backlash is likely — as lower-income groups may be disproportionately hurt. If the plan fails or gets reversed, the markets could tank sharply.
🧾 Bottom Line
Trump’s proposal to eliminate income tax and fund the government via tariffs is a radical, headline-grabbing idea — one that appeals to those who like disruption, economic experiments, and high risk/high reward thinking.
But economists widely dismiss it as unrealistic: current tariff revenues are nowhere near enough to replace income tax revenue — and scaling tariffs enough to get there would likely trigger inflation, regressivity, and socio-economic pain for many.
For a crypto investor or HODLer: this proposal might seem thrilling in theory — but the downside risk is real, sizable, and possibly imminent.
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