Did Donald Trump propose shutting down the IRS and replacing it with tariffs in 2024 or 2025?
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Executive summary
Donald Trump repeatedly proposed in 2024 and pressed the idea through 2025 that tariff revenue could be used to eliminate or sharply reduce federal income taxes and that the Internal Revenue Service could be effectively replaced or abolished — framing tariffs as an alternative revenue source and even using the phrase “External Revenue Service” in administration discussions [1] [2] [3]. Policy analysts and economists cited in major outlets and think tanks uniformly concluded the plan was implausible in practice because tariffs historically raise only a sliver of federal revenue and the tariff levels Trump floated would both fall far short of replacing income-tax receipts and impose significant economic costs [4] [5] [6].
1. What Trump actually proposed and when
The idea began as a campaign pitch in 2024 and was reiterated publicly into 2025: Trump and senior administration figures suggested using large, across‑the‑board tariffs (variously described as a 10% general tariff and much higher levies on China — 60% or more — along with specific tariffs on autos, lumber, chips and pharmaceuticals) to raise revenue that could offset or eliminate individual income taxes, and floated eliminating income tax for many taxpayers or abolishing the IRS over time [6] [7] [2] [1]. Administration language included talk of an “External Revenue Service” to collect import duties and thereby reduce reliance on the IRS — a phrase reported in multiple outlets as describing the plan to shift revenue collection toward tariffs [2] [4].
2. How proponents frame the swap
Proponents presented tariffs as a revival of 19th‑century revenue models — pointing to a historical period when tariffs accounted for much federal revenue and arguing that aggressive modern tariffs could fund major tax cuts or the elimination of income tax for broad swaths of Americans, which the administration cast as pro‑growth and pro‑middle class messaging [3] [1]. The Tax Foundation and administration summaries modeled tariff packages alongside other offsets (like repealing green-energy credits) when evaluating Trump’s overall tax framework, showing tariffs as the principal revenue source envisioned to cover proposed cuts [8] [5].
3. Why experts say it would not work
Multiple independent analyses and news outlets concluded tariffs cannot realistically replace income‑tax revenue: historically tariffs have accounted for only a tiny share of federal receipts (around 1–2% in recent years), whereas individual income taxes brought in trillions in 2024, creating an enormous gap that tariffs cannot close without unprecedented and economically destructive rates [4] [8] [5]. Economists warned that the very high tariffs Trump suggested would raise consumer prices, harm supply chains, shrink trade, disproportionately hit lower‑ and middle‑income households, and still likely leave large revenue shortfalls [6] [9] [7].
4. Numeric context offered by analysts
Estimates cited across reporting put the scale of the problem in stark terms: tariffs imposed and scheduled as of April 2025 would yield roughly $167 billion in 2025 on a conventional basis — under a quarter of what would be needed to eliminate income taxes for those below $200,000 under Trump’s proposals — while 2024 customs duty totals were only tens of billions compared with roughly $2.4–2.7 trillion from individual income taxes, according to Congressional Research Service and Treasury‑and‑think‑tank summaries [5] [4] [1]. Modeling by groups such as the Tax Foundation and Tax Policy Center found aggressive tariff packages would lower household real incomes and hit lower earners hardest while failing to match income‑tax revenue [8] [9].
5. Political messaging, incentives and alternative explanations
The proposal functions politically as a striking promise that appeals to trade‑protection sentiment and fundraising narratives — offering a simple slogan (“abolish the IRS”) while relying on tariff rhetoric that obscures the complex distributional and macroeconomic consequences; critics argue it reduces taxes on the wealthy while shifting burdens to consumers and trading partners, which aligns with partisan incentives to sell bold, headline‑driven plans even if implementation is dubious [10] [3]. Reporting shows both the administration’s public statements and campaign rhetoric drove the narrative, while independent economists and news outlets pushed back on technical feasibility [2] [11].
6. Bottom line
Yes — Donald Trump did propose in 2024 and reiterated in 2025 that tariffs could be used to replace significant portions of income‑tax revenue and that the IRS could be diminished or replaced with an “External Revenue Service” model; however, consensus expert analysis reported across the cited sources finds the proposal infeasible in practice, would produce substantial economic costs, and would not generate anywhere near the revenue collected from the federal individual income tax under current structures [2] [6] [4] [5].