Trump Plans IRS Replacement with Tariff-Based System

President Donald Trump plans to abolish the Internal Revenue Service (IRS) and replace it with an 'External Revenue Service' that would collect revenue through tariffs, aiming to shift the tax burden from American citizens to foreign entities. Commerce Secretary Howard Lutnick detailed that tariffs on imports, such as those on cruise ships and alcohol, would generate $700 billion annually, potentially balancing the budget and reducing taxes for Americans. The plan also involves reducing waste and fraud in government spending, with contributions from Elon Musk’s Department of Government Efficiency. Trump’s proposal has sparked discussions on its feasibility, given the current economic landscape that heavily relies on income taxes. Critics have raised concerns about the impact on inflation and international trade relations, while Trump argues it could bring the U.S. economy back to a pre-1913 'golden age.' However, the Federal Reserve has cautioned that the tariff strategy could lead to higher consumer prices.