The U.S. may "almost completely" eliminate income tax in the next couple of years due to tariff revenue, President Trump said late Thursday.
Why it matters: Offsetting the revenue from individual income taxes would require over $2.5 trillion a year in tariff collections, more than 10 times what the government actually took in during the last fiscal year.
What they're saying: "In the next couple of years, I think we'll substantially be cutting, or maybe cutting out completely, but we'll be cutting income tax," Trump said during an event Thursday evening.
- "Could be almost completely cutting it because the money we're taking in is going to be so large."
The big picture: As the Supreme Court weighs whether Trump's tariffs are even legal, and as administration officials continue to insist tariffs are not a revenue tool, Trump keeps making spending promises with the money.
- Lawmakers who would have to approve any of his various plans have made clear they'd prefer tariff revenue be used for deficit reduction before anything else.
Follow the money: The U.S. collected about $195 billion in tariff revenue in fiscal 2025, per Treasury data, and is on track to collect a little more than $400 billion in fiscal 2026.
- Individual income tax revenue in fiscal 2025 was $2.66 trillion, per the Treasury, and corporate tax revenue another $450 billion.
What to watch: The Supreme Court could rule at any time on the legality of the tariffs.
- If they're upheld, the question will become which of Trump's floated plans — like eliminating taxes, paying out $2,000 tariff dividend checks, farm bailouts, or debt reduction — will come first.
