Conversation with Grok:
President Trump has talked about ending the IRS and taxation of citizens in favor of tariffs and monetization of national assets. When might this happen?
President Trump has indeed discussed the idea of replacing the federal income tax and the Internal Revenue Service (IRS) with a system reliant on tariffs and, to a lesser extent, the monetization of national assets. However, predicting exactly when—or if—this might happen involves several layers of speculation, as it depends on political, legislative, and economic factors. Based on available information and the current context as of March 12, 2025, here’s an analysis of the timeline and feasibility.
Trump has floated this concept multiple times, including during his 2024 campaign and early in his second term, which began in January 2025. For instance, he has referenced the late 19th century, when the U.S. funded itself primarily through tariffs before the income tax was established in 1913, suggesting a return to such a model. He has proposed steep tariffs—such as 10% to 20% on all imports and up to 60% or more on Chinese goods—as a revenue source to offset the loss of income tax, which currently accounts for roughly half of the federal government’s nearly $5 trillion annual revenue. Additionally, posts on X and statements from administration figures like Commerce Secretary Howard Lutnick have amplified this narrative, with claims that the IRS could be replaced by an "External Revenue Service" focused on tariff collection.
The earliest this could theoretically begin is within Trump’s current term, which runs from January 20, 2025, to January 20, 2029. Some steps have already been taken that align with this vision. For example, Trump signed executive orders in January 2025 imposing tariffs on Canada, Mexico, and China (25% and 10% respectively, with promises of further increases), and he has directed investigations into additional tariff targets like lumber, steel, and autos, with implementation dates as early as April 2025. Reports also indicate the IRS faced significant layoffs—around 6,000 workers—in February 2025, suggesting a potential scaling back of its operations, though this could be tied to broader budget cuts rather than a full dismantling.
However, completely ending the IRS and income taxation requires congressional approval, as the IRS is a statutory agency established under the Internal Revenue Code, and tax policy falls under Congress’s constitutional authority. Trump’s party holds slim majorities in Congress as of March 2025, but passing such a radical overhaul would face significant hurdles. The 2017 Tax Cuts and Jobs Act (TCJA) provisions, set to expire at the end of 2025, provide a natural legislative window for tax reform. Trump has prioritized extending these cuts, which cost an estimated $4.5 trillion over a decade, and adding new exemptions (e.g., no taxes on tips, overtime, or Social Security benefits). Replacing income tax entirely with tariffs could be negotiated alongside this process, potentially targeting a 2026 implementation if legislation passes in late 2025.
Yet, experts widely skepticism the feasibility of tariffs fully replacing income tax revenue. In 2023, individual income taxes raised about $2.2 trillion, while tariffs brought in just $80 billion—roughly 2% of federal revenue. Even with aggressive tariffs, estimates suggest they might generate $3.8 trillion over a decade, far short of the $33 trillion from income taxes over the same period. High tariffs could also shrink imports (the tax base), raise consumer prices, and provoke retaliation, complicating revenue projections. Monetizing national assets—like leasing federal land or selling mineral rights—has been mentioned less concretely and lacks detailed proposals, making it a wildcard unlikely to bridge the gap soon.
Realistically, a partial shift could start in 2025 or 2026 if Trump uses executive authority to ramp up tariffs and push budget cuts via reconciliation, a process Republicans used for the TCJA. A full replacement of the IRS and income tax, though, might not occur until late in his term (2027–2029), if at all, given legislative gridlock, economic fallout risks, and the need for a viable revenue alternative. Posts on X claiming “the IRS is dead” as of early 2025 reflect enthusiasm but overstate progress—such a change remains aspirational without enacted law.
In short, initial moves like tariff hikes and IRS downsizing could happen in 2025, with a broader tax overhaul possibly tied to the TCJA expiration in late 2025 or early 2026. A complete end to citizen taxation and the IRS, however, hinges on uncertain political and economic outcomes, likely delaying it to the later years of Trump’s term, if it happens at all.