Overview
- In a Cabinet meeting this week, the president said tariff proceeds are so large the U.S. could drop income tax and issue $2,000 rebate checks to moderate- and middle-income people in 2026.
- Treasury data show $195 billion in customs duties for fiscal 2025 versus nearly $2.7 trillion from individual income taxes, highlighting the vast shortfall.
- Economists cited in the coverage call the idea a mathematical impossibility, estimating even revenue‑maximizing tariffs would raise under $400 billion a year.
- Administration advisers have floated annual tariff receipts of “over half a trillion, maybe towards a trillion,” projections experts say still fall far short of replacing income-tax revenue.
- Policy researchers say the “trillions” claim conflates tariff receipts with multiyear investment commitments—Bloomberg Economics tallies about $1.5 trillion in pledges that are not payments to the Treasury—while the Supreme Court is reviewing the tariffs after skeptical oral arguments.