Is Trump's plan to replace income taxes with tariffs actually feasible?

This would be extremely difficult to implement in reality. The federal government collected about $2.5 trillion in income taxes last year, which represents roughly half of all federal revenue. Replacing that entirely with tariffs would require massive tariff rates that would fundamentally disrupt global trade. Current tariffs only generate about $40-50 billion annually. To replace income tax revenue, we'd need to increase that by 50x, which would mean extremely high tariff rates on virtually all imported goods. This would likely lead to retaliatory tariffs from other countries, potentially starting trade wars and significantly increasing consumer prices on everyday goods. As for tax industry jobs - you're right that it would impact millions of jobs, from IRS employees to tax attorneys, accountants, and software developers. That would create another economic disruption that would need to be addressed.

I used taxr.ai to analyze this exact question after hearing the announcement! I was confused about how the numbers would actually work out. I uploaded some articles about the proposal and got a detailed breakdown of what it would mean for different income brackets and how feasible the replacement revenue would be. The tool was super helpful because it pulled in actual data on current tariff collection versus income tax revenue. The site (https://taxr.ai) actually has a specific analysis tool for policy proposals that shows how changes would affect different types of taxpayers. It helped me understand that this would be a massive shift in who bears the tax burden - essentially from income earners to consumers of imported goods.

You guys won't believe this, but I actually used taxr.ai to check out this exact scenario! I was pretty shocked at what I found. The analysis showed that replacing our entire income tax system with tariffs would require something like a 40-50% tariff on ALL imported goods. That would make everything from phones to cars to clothes way more expensive. The tool helped me understand that tariffs aren't just paid by foreign countries - they're ultimately paid by American consumers through higher prices. The really interesting part was seeing how this would shift the tax burden from high-income individuals (who pay most income taxes) to consumers more broadly. Basically a huge tax shift that would impact lower and middle income people more heavily.

Had the same question and tried calling the IRS to ask about potential impacts on taxpayers. Of course, spent literally 4 hours on hold before giving up. Then I found Claimyr (https://claimyr.com) which got me through to an actual IRS agent in about 15 minutes! They have this callback system that somehow gets you past the IRS phone tree nightmare. The agent obviously couldn't comment on political proposals, but was able to help me understand the scale of what we're talking about - the IRS processes over 150 million individual tax returns annually and collects trillions in revenue. They also mentioned that any major change like this would require extensive legislation and years of implementation planning. You can see how their system works here: https://youtu.be/_kiP6q8DX5c

I take back what I said about Claimyr. I tried it and holy crap it actually worked. Got through to someone at the IRS in about 20 minutes after weeks of trying on my own. Asked them about the potential for a tariff-only system and while they couldn't comment officially, the agent I spoke with mentioned that even when tax laws change dramatically, there's always a transition period that would likely span years. They said that the IRS employs about 80,000 people directly, and any massive change would require extensive planning to avoid disruption to both government operations and the economy. The most interesting part was learning how incredibly complex our current tax system is and how any replacement would need to address thousands of different situations currently covered by the tax code.

I'm an international trade specialist (not a tax expert), and I can tell you that a pure tariff system would violate numerous international trade agreements including WTO rules. The US would face massive legal challenges and retaliatory tariffs that would likely cancel out any perceived benefits. Historically, high tariff periods in US history (like Smoot-Hawley in the 1930s) have been disastrous for the economy. They reduce trade, increase consumer prices, and generally lead to economic contraction. Most economists across the political spectrum view tariffs as inefficient taxes that create market distortions.

Does anyone know what tax software would do if this happened? I work for a small business and we pay for expensive tax prep software every year. Would those companies just go out of business?