If you’ve read anything I’ve written about this topic, you know the pattern. News accounts about President Donald Trump’s tariffs routinely mention that raising revenue is one of Trump’s stated goals. But they hurry quickly past this because it’s totally idiotic to think tariffs could ever replace the income tax, even partially, as a meaningful source of federal revenue. And they’re right: This idea is really, really stupid! Where the press goes wrong is in not plumbing the depths of Trump’s commitment to this stupid idea.
Peter Navarro, the most crazily pro-tariff person in the Trump White House, estimates that Trump will raise $600 billion annually in tariff revenue, a number that set the conservative Wall Street Journal editorial page’s hair on fire (“Democrats, who love tax increases, haven’t dared pass such a large revenue heist”). The $600 billion estimate makes economic experts across the ideological spectrum think Navarro belongs in Saint Elizabeths. But it would represent only 20 percent of all income-tax revenue. Tariffs can never, ever become a major revenue source, okay? Class dismissed.
This presumption of canniness is fallacious even when applied to highly competent politicians, who are coherent perhaps 70 percent of the time. So you can imagine how wide of the mark it falls with Trump, who—impaired already by malignant narcissism and functional illiteracy—demonstrates on a near-daily basis growing signs of cognitive decline (the latest example being his petulant response last weekend to whether the tariffs would raise auto prices: “I couldn’t care less”). If Trump were your elderly grandpa you’d have taken the car keys from him months ago, and would be starting to investigate assisted living.
These journalists are all highly intelligent, ordinarily a good thing but here an obstacle to understanding. Being somewhat less intelligent, I find myself less beholden to the Coherence Fallacy and therefore more able to take Trump at his word when he says that “tariff” is “the most beautiful word in the dictionary.” In a meeting with Republican congressional leaders in June 2024 Trump said he favored an “all tariff policy” that would allow the United States to abandon the income tax. He said it again in October 2024, first to a bunch of guys in a Bronx barbershop (“When we were a smart country, in the 1890s…. [we] had all tariffs. We didn’t have an income tax”), and then to Joe Rogan. (Rogan: “Were you serious about that?” Trump: “Yeah, sure, why not?”) Trump said it yet again in his inauguration speech (“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens”). One month later, Trump’s tariff-crazed Commerce secretary, Howard Lutnick, discussed the idea in some detail:
This drew a little more attention than Trump’s remarks. Maybe that was because Lutnick’s scheme was one-quarter less insane. In Lutnick’s formulation, the IRS would still tax people whose income exceeded $150,000. Still, exempting everybody else would cut loose at least three-quarters of all current taxpayers, at a cost to the Treasury of about $1 trillion per year. (The under-$150,000 cohort would still have to pay payroll tax, which for most in this group exceeds what they pay in income tax. But I digress.)
Have you noticed that Trump never gets a number right? He will never acknowledge arithmetic. I don’t feel certain Trump’s even signed on to Lutnick’s compromise idea of eliminating the income tax only on incomes below $150,000. But to pursue any version of this scheme, Trump needs to slap tariffs on everything that moves, while leaving his underlings to supply a rationale. Just about any justificaiton will do.
People puzzle over why Trump singles out Canada and Mexico for tariff abuse. Puzzle no more: They’re our two biggest trading partners. Higher import volume, more tariff revenue. It’s just dumb luck that China, our third-biggest trading partner, gives us legitimate reasons to impose tariffs. If it didn’t, Trump would still be targeting it—again, for the revenue.
When Trump unveils his Liberation Day tariff package April 2, we’ll hear all sorts of sophisticated rationales from administration officials and the press. Don’t listen to them! Listen to Grandpa. Odds are he’ll brag about how much revenue they’ll raise. He won’t make any sense at all. Pay attention.
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