Could President Trump’s newly revealed tax plan eliminate income taxes for most Americans? Commerce Secretary Howard Lutnick has shared an ambitious plan to end income tax completely for people who earn under $150,000 per year.
At a glance:
- Commerce Secretary Howard Lutnick revealed Trump’s goal of eliminating income taxes for Americans earning under $150,000 annually
- The plan would affect approximately 93% of Americans and could be implemented without increasing national debt
- Funding would come from tariffs on foreign nations and addressing overseas tax fraud
- Before 1913, the United States operated without income tax, relying primarily on tariffs
- Critics worry about potential impacts on Social Security and Medicare funding, which currently rely heavily on payroll taxes
Trump’s Bold Tax Vision
Commerce Secretary Howard Lutnick recently revealed former President Donald Trump’s ambitious plan to eliminate income taxes for Americans earning less than $150,000 annually. This revolutionary proposal could affect approximately 93% of American taxpayers, fundamentally transforming the nation’s tax system and providing substantial relief to working-class families.
“I know what his goal is, no tax for anybody who makes less than $150,000 a year. That’s his goal, that’s what I’m working for,” Lutnick stated while discussing the administration’s fiscal strategy.
So this isn’t just rumor: this is exactly what Trump is planning to do.
Tariffs and Historical Perspective
Lutnick provided valuable historical context for the proposal, noting that before 1913, the United States operated without an income tax system. Instead, the federal government relied primarily on tariffs as its main revenue source, a strategy the Trump administration is considering revisiting.
The Commerce Secretary highlighted how income tax was originally introduced to fund World War I and explained how America’s tariff policies have shifted throughout different economic periods. He noted that the U.S. lowered tariffs after World War II as part of efforts to rebuild other countries, including initiatives like the Marshall Plan.
Lutnick pointed out significant disparities in current international tariff structures that disadvantage American businesses. “All those ships are paying no tax, it’s a tax scam,” Lutnick remarked when discussing how foreign nations benefit from the current system while American companies face unfair competition.
Funding Solutions and Implementation
To offset the revenue reduction from eliminating these taxes, the plan calls for imposing tariffs on foreign nations and aggressively addressing overseas tax evasion. Lutnick argued that it can be done because of the United States’ position as the world’s largest consumer market, suggesting that foreign countries should pay a “membership fee” for access to American consumers.
The administration also proposed additional revenue streams, including a “Gold Card” visa program that would charge $5 million for visas offering Green Card privileges. These innovative funding approaches could potentially maintain government revenue while eliminating income taxes for most Americans.
President Trump has expressed confidence in the plan, stating, “America’s gonna be very rich again and it’s gonna happen very quickly. It’s time for the United States to return to the system that made us richer and more powerful than ever before.”
Earlier this month, House Republicans approved a budget resolution containing $4.5 trillion in tax cuts paired with $2 trillion in spending reductions. If the Senate passes this resolution, it could lay the groundwork for implementing these transformative fiscal policies.