President Donald Trump’s administration is advancing a plan to eliminate the income tax and replace the IRS with a system that funds the federal government through tariffs, according to Commerce Secretary Howard Lutnick.
Speaking on Fox News, Lutnick explained that Trump envisions an External Revenue Service (ERS) that would collect revenue from foreign countries rather than American workers. Under the proposal, government funding would come from tariffs instead of income taxes, which Lutnick framed as a major step toward putting money back in the hands of U.S. citizens.
If Trump is able to end income taxes, and the Democrats fight it, which they will, they will NEVER win another election!
Anyone disagree? pic.twitter.com/kBbU4hHzBF
— SaltyGoat (@SaltyGoat17) March 6, 2025
“Wouldn’t it be amazing to stop paying taxes to the Internal Revenue Service and have the External Revenue Service of Make America Great Again replace our taxes?” Lutnick stated, outlining Trump’s tax reform goals.
The plan also includes measures to eliminate taxes on overtime pay, tips and senior citizens’ income, part of Trump’s broader effort to ease financial burdens on working Americans. Trump has previously cut taxes during his first term, but this proposal would represent a fundamental restructuring of how the government collects revenue.
Trump’s emphasis on tariffs as a funding mechanism aligns with his economic strategy, which has long focused on leveraging trade policy to benefit the United States. He has repeatedly argued that foreign countries should contribute more to the cost of doing business with the U.S.
While specifics on the ERS remain unclear, the administration’s focus on eliminating income tax marks one of the most significant tax reform proposals in modern U.S. history.
