TARIFFS WON’T REPLACE THE INCOME TAX — AND THE MATH ISN’T EVEN CLOSE
December 2025
The Trump administration is celebrating $31.4 billion in tariff revenue for October — the highest monthly take on record since modern reporting began. Supporters are touting this as transformative: proof that tariffs can fund the government, eliminate income taxes, and send “dividend checks” back to Americans.
But set aside the applause and look at the numbers. October didn’t just bring in record tariff revenue — it also delivered a massive monthly deficit. If tariffs are supposedly the silver bullet that replaces the income tax, why are we still going backwards?
During a Thanksgiving call with U.S. service members, the President suggested the tariff boom could soon eliminate federal income taxes for many Americans, claiming hundreds of billions in annual tariff revenue could both fund government operations and reduce the national debt.
This argument collapses the moment you run the math.
Even if tariff revenue exploded to $100 billion per month, that’s $1.2 trillion a year. Today, that’s barely enough to cover interest expenses alone on the $38 trillion national debt. Not Medicare. Not Social Security. Not defense. Not infrastructure. Not anything else. Just interest.
And yet we’re being told tariffs can both wipe out income taxes and shrink the deficit.
That’s not economic policy — that’s alchemy.
I spent years mocking the “math” behind certain progressive fiscal fantasies. Now I see the same magical thinking traded by the right. Tariffs cannot replace the income tax. There is no version of that equation that works.
And the historical comparison — that America “once ran on tariffs” — is equally flawed. The nation that existed before the income tax isn’t the nation we inhabit today. We weren’t a global military power. We didn’t run massive entitlement programs, complex social systems, or the world’s most expensive healthcare apparatus. The scale, structure, and obligations of the United States are radically different.
To pretend otherwise is to build a policy on nostalgia instead of arithmetic.
This is the danger of political narratives: say something often enough, loudly enough, to friendly enough audiences — and it starts to sound true. Even when it’s nonsense.
As Buck Sexton recently put it, it’s like living in eastern Colorado and loudly insisting the Rocky Mountains don’t exist. Eventually, people repeat it because it’s familiar. Then one day you drive west, see the Rockies towering over the horizon — and instead of being angry about the lie, you’re upset that reality didn’t bend to rhetoric.
Tariffs can be debated on many grounds: industrial strategy, national security, trade leverage, even moral philosophy. But they cannot erase the need for federal income tax. They will not cover the total cost of our government. And they certainly won’t painlessly return cash to Americans while simultaneously solving the debt crisis.
You can’t replace trillions of annual tax revenue with a tariff stream that — at its most aggressive theoretical peak — doesn’t even cover today’s interest payments.
The numbers don’t work. They will never work.
Believing otherwise isn’t fiscal conservatism — it’s fantasy.
And fantasies, when written into policy, are expensive.
