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Trump wants to get rid of income taxes for those earning under $150k. He most likely intends to pull out the financial pillar of income tax, and replace it wit

Trump wants to get rid of income taxes for those earning under $150k. He most likely intends to pull out the financial pillar of income tax, and replace it with tariffs. He is likely waiting for the price crunch to blow up so he can step in an give everyone the "gift" of no income tax.

piva00 2y ago
It would only make sense if consumption of tariff-imposed goods would keep steady to make up for the loss of income taxes, with consumer confidence cratering there's no way consumption keeps steady. On top of that you have inflation which will cause the Fed to raise interest rates, further lowering credit offering for consumption, bond yields raising which costs more of the budget for interest payment, requiring more taxes, it's a stupid plan all around...
andsoitis 2y ago
Income taxes are progressive while tariffs are regressive, so those under $150k are likely to be worse off.
- Workaccount2 2y ago
  He's not particularly intelligent.
- SoftTalker 2y ago
  About 3/4 of households make under $150k/year. Having no income tax will be hugely popular with them. It would kill the argument that Trump is only interested tax breaks for the rich.
  - Workaccount2 2y ago
    It would also make it politically untenable to get rid of tariffs and reinstate income tax.
    - yurishimo 2y ago
      Yea, this is the thing. Can you imagine transitioning over to a 0 income tax situation and then adding all of that infrastructure back? You know DOGE is going to nuke the servers that do it and rm -rf the repositories so if it's ever returned to law, everything will need to be done from scratch (likely making it untenable). If you're an IT professional in the US Government, I would argue you have an obligation as a concerned citizen to make some local backups of the code powering the systems you work on every day and keep them somewhere safe...
    - tzs 2y ago
      Or it would make it politically quite tenable to get rid of tariffs and greatly raise income taxes on people making over $150k.
      - SoftTalker 2y ago
        They already do pay the vast majority of income taxes.
        sorcerer-mar 2y ago
        The main takeaway from this fact being astonishment at just how much the top 1% really earns!
        tzs 2y ago
        True, they pay around 75-80% of income taxes. I suppose the good news for them then is that if tariffs fail to replace the 20-25% of income tax that would be lost by eliminating income tax on people making under $150k and it has to come from raising taxes on the folks making over $150k it would only be a 25-33% tax increase on them.
        int_19h 2y ago
        It's a good start, now let's raise capital gains taxes to where they rightly out to be (i.e. more than sweat-of-the-brow income, not less).
        2y ago
  - bigbadfeline 2y ago
    I don't see the numbers though. Tariffs are a compete non-starter as far as government revenue goes, "income from tariffs" on the "countries that have been robbing us" is mere theatrics (those countries only accepted what was given/pushed to them)... Ergo, borrowing remains the only option, with lots and lots of inflation. I'm not sure how popular that will be.
- ty6853 2y ago
  On first glance that's the case, in practice they clamp down hardest on middle and professional classes. The rich borrow against gains or pay long term capital gains, or just "re-invest" (no profit) into durable assets for their business that hold value longer than they'll be alive. The scam of income tax is that it's progressive on paper but not in practice.
  - grunder_advice 2y ago
    You are not wrong, but that situation won't change if you moved to another taxation scheme. The poor are too poor to have much to take from them. So they go after those who are a rung or two above to tax. The dynamic does not change irrespective of taxation system.
  - debug-desperado 2y ago
    "The scam of income tax is that it's progressive on paper but not in practice." Perfectly put. It's always bothered me that the tax brackets don't continue on in a logarithmic fashion, e.g. new brackets at 1.5 million, 15 million, 150 million, etc.
    - mindslight 2y ago
      Focusing on brackets for earned income is a distraction. Those only apply to relatively rare sports stars, actors, etc. The real cheats are things like tax rates being lower for capital gains, and that people receiving rental/royalty income can subtract all of their expenses (whereas wage earners cannot).
      - atmavatar 2y ago
        Arguably a bigger cheat is that if you have enough wealth tied up in stocks, you can realize capital gains for the sake of taking out loans to live off of without having to realize the gains for the sake of taxes. Then, you can pass those investments onto your inheritors with a stepped-up cost basis so they don't have to pay tax on the gains, either.
- Whoppertime 2y ago
  How are tariffs regressive? Income taxes are obviously progressive. If you earn $100,000 you are going to be paying a higher percentage of your earnings compared to someone making $10,000 or $50,000. It's not intuitive that someone who makes $100,000 is going to be paying less in tariffs than someone making $50,000 though. How does that work?
  - StackRanker3000 2y ago
    They’re regressive in the sense that people with lower income spend more of it on consumption than people with higher income or wealth, who can save or invest at a higher rate.
SoftTalker 2y ago
Yes, with Trunp everything is a lever he's using in a negotiation to get what he really wants. I'm not claiming he's playing "4d Chess" or is some kind of wizard but everything is a "deal" to him.
llm_nerd 2y ago
>Trump wants to get rid of income taxes for those earning under $150k. Trump has openly talked about his plan to replace income tax with tariffs for years. Not just for "earnings under $150k" -- that was some post-facto inventions by Howard "Used Car Salesman" Lutnick on some news program appearance after tariffs were proving spectacularly unpopular -- but Trump has constantly ruminated on the grand old days of the 1890s, at least when he isn't talking about that ol' timey word "groceries" or showerheads, light bulbs and coal. And every economist save a few nuts like Pete Navarro (or his associate Ron Vara) have soundly announced that it's an incredibly stupid plan. Here in reality, thus far the only tax break offered up has been an extension on tax reductions for the super rich. No tax free tips, overtime, etc. Only the super rich have benefitted. Further, it economically makes zero sense and Trump has repeatedly argued completely contrary "wins" from his tariffs: both that all of the manufacturing and other production will return to the US (ignore that the US has effectively full employment, and such would be massively inflationary without a dire reduction in US quality of life), yet somehow he's going to make trillions from tariffs, which would require such an egregious tariff rate that there would be no imports at all and thus no tariff income. Federal spending would have to drop by almost 80% for tariff funding of the government to be remotely rational, and that means demolishing the military and social security. >so he can step in an give everyone the "gift" of no income tax Yeah, that isn't at all how Trump operates. Much like DOGE and their hilarious "$5000 cheques for all the savings" that will never, ever happen -- and quite the contrary the government financial position is more dire than ever -- Trump makes all of his promises up front. Like his tips and overtime tax claims, both of which are never going to happen. Or his amazing healthcare plan that's coming in two weeks. Or how about that line of countries offering everything and their 90 deals in 90 days. This guy is the definition of overpromising and underdelivering. There is zero scenario where tariffs even cover the current deficit. And as Trump demolishes the credibility of the USD and US TBills (people don't realize that US banks have been increasingly forced to buy these as the global market as dissolved), it's going to get drastically worse.
- bloomingeek 2y ago
  You stumped most everyone when you used the word "reality". (Which is correct.) Most are so scared of where the country is heading, reality is pretty foggy. "Criminality", now there's a timely word we can all understand, except the big orange dummy has manipulated the supreme court so much we're not sure if we can trust it to maintain the rule of law. (After all, the tariffs seem to be a tool to crash the stock market, buy low/sell high, no?) Shamefully, it doesn't take much to completely fool the boomers (My generation, the stupidest of all time.) by making enemies of almost anything or anyone.
wing-_-nuts 2y ago
>Trump wants to get rid of income taxes for those earning under $150k. Getting rid of income tax will require legislation from congress. If we're in the midst of a tariff induced recession, what are the chances his party keeps congress in '26? Also, remember when the British government tried to pass a massive tax cut funded with debt? Remember how that went down? The chances of the US being able to get rid of income tax in the next 4 years is basically zero.
- alabastervlog 2y ago
  > Getting rid of income tax will require legislation from congress. If we're in the midst of a tariff induced recession, what are the chances his party keeps congress in '26? Their chances will maybe be higher, if they cut income taxes. All it'll cost is moving our already-nigh-inevitable debt crisis a few decades closer to today. > Also, remember when the British government tried to pass a massive tax cut funded with debt? Both Republican administrations this millennium have done exactly that. I see no reason to expect they won't do it again.
- ivewonyoung 2y ago
  > Getting rid of income tax will require legislation from congress. If we're in the midst of a tariff induced recession, what are the chances his party keeps congress in '26? The optics of Democrats voting against a full tax cut for those earning less than $150K would be interesting to say the least.
  - wing-_-nuts 2y ago
    I mean someone's gotta be the responsible adult in the room right? Every projection I've seen on tariffs doesn't put the revenue generated anywhere near enough to cover cutting income tax. You want to rework the tax system, be my guest, but pay for it, and don't tank the world economy in the process.
    - FLT8 2y ago
      If the tariffs are able to act as a sustained source of revenue then they're not working to bring manufacturing back to the US. If they work to bring manufacturing back then they're not going to raise much revenue (long term). Either way, the bulk of the pain is going to be borne by average people.
tzs 2y ago
But he also says the tariffs will bring manufacturing back. If that works then the tariff money tanks.
Isamu 2y ago
He wants to get rid of his taxes, reducing other people’s taxes is part of the deal. Tariffs are moving taxes around, everyone pays but he’s hoping that he will be the least affected.
- alabastervlog 2y ago
  Actually-rich people pay little or no income tax. Most of what they pay is capital gains, and usually the long-term rate (15% or 20%, depends), which is lower than all but the lowest two (0%, 12%) of seven brackets applied to people who actually work for a living. Plus they don't pay FICA on that, which is another ~7.5% for W2 and ~15% for contract workers. Also, they often manage to avoid even paying the long-term capital gains rate.
  - Whoppertime 2y ago
    It depends what you mean by rich people. Do you mean people like Doctors and Lawyers who work for their money, or do you mean investors and CEOs who created a company worth millions/billions, and the shares they own in that company mean they are also worth millions/billions. Because I can tell you the former certainly pay income tax, and I have heard from many doctors and lawyers that they weren't planning on working on that weekend because that marginal tax rate made the juice not worth the squeeze so they spent the weekend on the golf course instead
    - alabastervlog 2y ago
      You're not really rich if you have to work for pay to maintain a (relatively) expensive life style. It's the distinction between the rich and the "professional class" or "upper-middle class". The really rich are capitalists, in the sense of making their money from owning stuff. Looks like the top marginal rate's about 50% (including the top state rate of ~13%), but that's also way past the point where FICA's dropped off so it's not quite as bad (relative to middle tax brackets) as it looks. I can definitely see turning down ~50% of (say) $2,000 in exchange for a free Saturday if I'm already making north of a quarter-million a year (individual—brackets are higher for joint filing). Hell, when I was a freelancer, for every single vacation I took the main cost was foregone income, so I've even done basically that exact thing, though without being in that high a tax bracket. In fact, even today, I could probably take on paying work many weekends, and never do, so I make the same choice all the time despite being well under the top tax bracket. Like, working the weekend normally isn't worth it for most people who can possibly afford not to do it, tax bracket be damned. Did these doctors and lawyers work a pretty normal number of hours that week? If so, I don't really understand what you're getting at. Seems like they just wanted to frame a normal thing most people do as a complaint about taxes.
mrguyorama 2y ago
This is entirely contrary to their other supposed goal, which is to bring back manufacturing. If we bring back manufacturing, tariffs won't pay our bills, because nobody will pay them. It's almost like it's bullshit.
throw310822 2y ago
Well, just to play the devil's advocate a bit, this is definitely a crazy idea but it might have some logic to it: 1) taxing consumptions instead of income has the advantage of being much harder to evade. It puts an end to tricks like living off loans or even simply detracting expenses- you cannot detract anything if you're not taxed at all; 2) only taxing imported goods means that anything that benefits the local economy can be purchased tax-free; while imports from abroad become, say, twice as expensive as before. However, you also have a much higher disposable income and, at least at the beginning, no other option. So the gist of it would be: we levy the same amount of money as before by taxing exclusively consumptions, and we exempt from taxation all domestically produced goods because it's still money reinvested in the economy.
- tempestn 2y ago
  The problem is that you massively distort the economy, making it less efficient aka poorer. And that's even before considering the fact that other countries will retaliate.
  - Whoppertime 2y ago
    Wasn't the income tax introduced as a temporary measure in WW1, and prior to that the majority of state income was generated via tariffs? Shifting the burden can certainly cause distortions, but we already caused those distortions getting into this situation in the first place.
    - tempestn 2y ago
      Tariffs were done in the past because they were easier, but I think they distort less than an income tax. You're literally favoring domestic producers, right?

piva00 2y ago

It would only make sense if consumption of tariff-imposed goods would keep steady to make up for the loss of income taxes, with consumer confidence cratering there's no way consumption keeps steady. On top of that you have inflation which will cause the Fed to raise interest rates, further lowering credit offering for consumption, bond yields raising which costs more of the budget for interest payment, requiring more taxes, it's a stupid plan all around...

andsoitis 2y ago

Income taxes are progressive while tariffs are regressive, so those under $150k are likely to be worse off.

Workaccount2 2y ago
He's not particularly intelligent.
SoftTalker 2y ago
About 3/4 of households make under $150k/year. Having no income tax will be hugely popular with them. It would kill the argument that Trump is only interested tax breaks for the rich.
- Workaccount2 2y ago
  It would also make it politically untenable to get rid of tariffs and reinstate income tax.
  - yurishimo 2y ago
    Yea, this is the thing. Can you imagine transitioning over to a 0 income tax situation and then adding all of that infrastructure back? You know DOGE is going to nuke the servers that do it and rm -rf the repositories so if it's ever returned to law, everything will need to be done from scratch (likely making it untenable). If you're an IT professional in the US Government, I would argue you have an obligation as a concerned citizen to make some local backups of the code powering the systems you work on every day and keep them somewhere safe...
  - tzs 2y ago
    Or it would make it politically quite tenable to get rid of tariffs and greatly raise income taxes on people making over $150k.
    - SoftTalker 2y ago
      They already do pay the vast majority of income taxes.
      - sorcerer-mar 2y ago
        The main takeaway from this fact being astonishment at just how much the top 1% really earns!
      - tzs 2y ago
        True, they pay around 75-80% of income taxes. I suppose the good news for them then is that if tariffs fail to replace the 20-25% of income tax that would be lost by eliminating income tax on people making under $150k and it has to come from raising taxes on the folks making over $150k it would only be a 25-33% tax increase on them.
      - int_19h 2y ago
        It's a good start, now let's raise capital gains taxes to where they rightly out to be (i.e. more than sweat-of-the-brow income, not less).
      - 2y ago
- bigbadfeline 2y ago
  I don't see the numbers though. Tariffs are a compete non-starter as far as government revenue goes, "income from tariffs" on the "countries that have been robbing us" is mere theatrics (those countries only accepted what was given/pushed to them)... Ergo, borrowing remains the only option, with lots and lots of inflation. I'm not sure how popular that will be.
ty6853 2y ago
On first glance that's the case, in practice they clamp down hardest on middle and professional classes. The rich borrow against gains or pay long term capital gains, or just "re-invest" (no profit) into durable assets for their business that hold value longer than they'll be alive. The scam of income tax is that it's progressive on paper but not in practice.
- grunder_advice 2y ago
  You are not wrong, but that situation won't change if you moved to another taxation scheme. The poor are too poor to have much to take from them. So they go after those who are a rung or two above to tax. The dynamic does not change irrespective of taxation system.
- debug-desperado 2y ago
  "The scam of income tax is that it's progressive on paper but not in practice." Perfectly put. It's always bothered me that the tax brackets don't continue on in a logarithmic fashion, e.g. new brackets at 1.5 million, 15 million, 150 million, etc.
  - mindslight 2y ago
    Focusing on brackets for earned income is a distraction. Those only apply to relatively rare sports stars, actors, etc. The real cheats are things like tax rates being lower for capital gains, and that people receiving rental/royalty income can subtract all of their expenses (whereas wage earners cannot).
    - atmavatar 2y ago
      Arguably a bigger cheat is that if you have enough wealth tied up in stocks, you can realize capital gains for the sake of taking out loans to live off of without having to realize the gains for the sake of taxes. Then, you can pass those investments onto your inheritors with a stepped-up cost basis so they don't have to pay tax on the gains, either.
Whoppertime 2y ago
How are tariffs regressive? Income taxes are obviously progressive. If you earn $100,000 you are going to be paying a higher percentage of your earnings compared to someone making $10,000 or $50,000. It's not intuitive that someone who makes $100,000 is going to be paying less in tariffs than someone making $50,000 though. How does that work?
- StackRanker3000 2y ago
  They’re regressive in the sense that people with lower income spend more of it on consumption than people with higher income or wealth, who can save or invest at a higher rate.

SoftTalker 2y ago

Yes, with Trunp everything is a lever he's using in a negotiation to get what he really wants. I'm not claiming he's playing "4d Chess" or is some kind of wizard but everything is a "deal" to him.

llm_nerd 2y ago

>Trump wants to get rid of income taxes for those earning under $150k. Trump has openly talked about his plan to replace income tax with tariffs for years. Not just for "earnings under $150k" -- that was some post-facto inventions by Howard "Used Car Salesman" Lutnick on some news program appearance after tariffs were proving spectacularly unpopular -- but Trump has constantly ruminated on the grand old days of the 1890s, at least when he isn't talking about that ol' timey word "groceries" or showerheads, light bulbs and coal. And every economist save a few nuts like Pete Navarro (or his associate Ron Vara) have soundly announced that it's an incredibly stupid plan. Here in reality, thus far the only tax break offered up has been an extension on tax reductions for the super rich. No tax free tips, overtime, etc. Only the super rich have benefitted. Further, it economically makes zero sense and Trump has repeatedly argued completely contrary "wins" from his tariffs: both that all of the manufacturing and other production will return to the US (ignore that the US has effectively full employment, and such would be massively inflationary without a dire reduction in US quality of life), yet somehow he's going to make trillions from tariffs, which would require such an egregious tariff rate that there would be no imports at all and thus no tariff income. Federal spending would have to drop by almost 80% for tariff funding of the government to be remotely rational, and that means demolishing the military and social security. >so he can step in an give everyone the "gift" of no income tax Yeah, that isn't at all how Trump operates. Much like DOGE and their hilarious "$5000 cheques for all the savings" that will never, ever happen -- and quite the contrary the government financial position is more dire than ever -- Trump makes all of his promises up front. Like his tips and overtime tax claims, both of which are never going to happen. Or his amazing healthcare plan that's coming in two weeks. Or how about that line of countries offering everything and their 90 deals in 90 days. This guy is the definition of overpromising and underdelivering. There is zero scenario where tariffs even cover the current deficit. And as Trump demolishes the credibility of the USD and US TBills (people don't realize that US banks have been increasingly forced to buy these as the global market as dissolved), it's going to get drastically worse.

bloomingeek 2y ago
You stumped most everyone when you used the word "reality". (Which is correct.) Most are so scared of where the country is heading, reality is pretty foggy. "Criminality", now there's a timely word we can all understand, except the big orange dummy has manipulated the supreme court so much we're not sure if we can trust it to maintain the rule of law. (After all, the tariffs seem to be a tool to crash the stock market, buy low/sell high, no?) Shamefully, it doesn't take much to completely fool the boomers (My generation, the stupidest of all time.) by making enemies of almost anything or anyone.

wing-_-nuts 2y ago

>Trump wants to get rid of income taxes for those earning under $150k. Getting rid of income tax will require legislation from congress. If we're in the midst of a tariff induced recession, what are the chances his party keeps congress in '26? Also, remember when the British government tried to pass a massive tax cut funded with debt? Remember how that went down? The chances of the US being able to get rid of income tax in the next 4 years is basically zero.

alabastervlog 2y ago
> Getting rid of income tax will require legislation from congress. If we're in the midst of a tariff induced recession, what are the chances his party keeps congress in '26? Their chances will maybe be higher, if they cut income taxes. All it'll cost is moving our already-nigh-inevitable debt crisis a few decades closer to today. > Also, remember when the British government tried to pass a massive tax cut funded with debt? Both Republican administrations this millennium have done exactly that. I see no reason to expect they won't do it again.
ivewonyoung 2y ago
> Getting rid of income tax will require legislation from congress. If we're in the midst of a tariff induced recession, what are the chances his party keeps congress in '26? The optics of Democrats voting against a full tax cut for those earning less than $150K would be interesting to say the least.
- wing-_-nuts 2y ago
  I mean someone's gotta be the responsible adult in the room right? Every projection I've seen on tariffs doesn't put the revenue generated anywhere near enough to cover cutting income tax. You want to rework the tax system, be my guest, but pay for it, and don't tank the world economy in the process.
  - FLT8 2y ago
    If the tariffs are able to act as a sustained source of revenue then they're not working to bring manufacturing back to the US. If they work to bring manufacturing back then they're not going to raise much revenue (long term). Either way, the bulk of the pain is going to be borne by average people.

tzs 2y ago

But he also says the tariffs will bring manufacturing back. If that works then the tariff money tanks.

Isamu 2y ago

He wants to get rid of his taxes, reducing other people’s taxes is part of the deal. Tariffs are moving taxes around, everyone pays but he’s hoping that he will be the least affected.

alabastervlog 2y ago
Actually-rich people pay little or no income tax. Most of what they pay is capital gains, and usually the long-term rate (15% or 20%, depends), which is lower than all but the lowest two (0%, 12%) of seven brackets applied to people who actually work for a living. Plus they don't pay FICA on that, which is another ~7.5% for W2 and ~15% for contract workers. Also, they often manage to avoid even paying the long-term capital gains rate.
- Whoppertime 2y ago
  It depends what you mean by rich people. Do you mean people like Doctors and Lawyers who work for their money, or do you mean investors and CEOs who created a company worth millions/billions, and the shares they own in that company mean they are also worth millions/billions. Because I can tell you the former certainly pay income tax, and I have heard from many doctors and lawyers that they weren't planning on working on that weekend because that marginal tax rate made the juice not worth the squeeze so they spent the weekend on the golf course instead
  - alabastervlog 2y ago
    You're not really rich if you have to work for pay to maintain a (relatively) expensive life style. It's the distinction between the rich and the "professional class" or "upper-middle class". The really rich are capitalists, in the sense of making their money from owning stuff. Looks like the top marginal rate's about 50% (including the top state rate of ~13%), but that's also way past the point where FICA's dropped off so it's not quite as bad (relative to middle tax brackets) as it looks. I can definitely see turning down ~50% of (say) $2,000 in exchange for a free Saturday if I'm already making north of a quarter-million a year (individual—brackets are higher for joint filing). Hell, when I was a freelancer, for every single vacation I took the main cost was foregone income, so I've even done basically that exact thing, though without being in that high a tax bracket. In fact, even today, I could probably take on paying work many weekends, and never do, so I make the same choice all the time despite being well under the top tax bracket. Like, working the weekend normally isn't worth it for most people who can possibly afford not to do it, tax bracket be damned. Did these doctors and lawyers work a pretty normal number of hours that week? If so, I don't really understand what you're getting at. Seems like they just wanted to frame a normal thing most people do as a complaint about taxes.

mrguyorama 2y ago

This is entirely contrary to their other supposed goal, which is to bring back manufacturing. If we bring back manufacturing, tariffs won't pay our bills, because nobody will pay them. It's almost like it's bullshit.

throw310822 2y ago

Well, just to play the devil's advocate a bit, this is definitely a crazy idea but it might have some logic to it: 1) taxing consumptions instead of income has the advantage of being much harder to evade. It puts an end to tricks like living off loans or even simply detracting expenses- you cannot detract anything if you're not taxed at all; 2) only taxing imported goods means that anything that benefits the local economy can be purchased tax-free; while imports from abroad become, say, twice as expensive as before. However, you also have a much higher disposable income and, at least at the beginning, no other option. So the gist of it would be: we levy the same amount of money as before by taxing exclusively consumptions, and we exempt from taxation all domestically produced goods because it's still money reinvested in the economy.

tempestn 2y ago
The problem is that you massively distort the economy, making it less efficient aka poorer. And that's even before considering the fact that other countries will retaliate.
- Whoppertime 2y ago
  Wasn't the income tax introduced as a temporary measure in WW1, and prior to that the majority of state income was generated via tariffs? Shifting the burden can certainly cause distortions, but we already caused those distortions getting into this situation in the first place.
  - tempestn 2y ago
    Tariffs were done in the past because they were easier, but I think they distort less than an income tax. You're literally favoring domestic producers, right?