Trump floats income tax cut to ease tariff impact
President Trump floated a new income tax cut on Sunday as a way to mitigate the impact of his sweeping tariffs, which polls show Americans increasingly believe will lead to higher prices.
“When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated,” Trump wrote in a post on his Truth Social platform on Sunday.
“Focus will be on people making less than $200,000 a year,” he continued.
Trump defended the strategy behind his steep tariffs in his post, maintaining "massive numbers of jobs are already being created, with new plants and factories currently being built or planned. It will be a BONANZA FOR AMERICA!!! THE EXTERNAL REVENUE SERVICE IS HAPPENING!!!”
The comments echo previous suggestions from the president about potentially getting rid of federal income tax altogether and replacing it with tariffs or other levies. Some economists have raised questions about the feasibility of generating sufficient revenue through tariffs.
Trump announced several waves of tariffs since taking office in January, including a 10 percent baseline and higher “reciprocal” tariffs on individual nations. Those higher tariffs on dozens of countries were paused to let nations try to make deals to avoid facing the steep levies.
Most of the country-specific tariffs proposed by Trump are slated to take effect in July — barring any new trade deals or policy shifts ahead of that deadline — after he paused them for 90 days.
However, tariffs on goods from China, Mexico and Canada, as well global levies on items such as automobiles and steel and aluminum, have already taken effect and disrupted global markets.
A recent Associated Press-NORC Research poll found 3 in 4 Americans expect Trump's tariff policies to raise the price of consumer goods in the U.S. At least 6 in 10 Americans said in an NBC News Stay Tuned survey released Sunday they disapprove of Trump's handling of trade and tariffs as well as inflation.
Trump’s latest comments came a day before Congress is set to return to Washington, with the president’s Republican allies on Capitol Hill determined to pass his legislative agenda, including extending his signature 2017 tax cuts.