Speaking at the 2025 Republican Issues Conference in Miami, Trump pointed to the period between 1870 and 1913 as a golden era for the U.S. economy. During this time, the federal government funded itself primarily through tariffs, with no income tax in place. “The U.S. operated entirely on tariffs from 1870 to 1913—and that was the richest period in American history,” Trump said. He argued that tariffs could once again become the backbone of the nation’s economy, allowing Americans to keep more of their hard-earned money.
To manage this new system, Trump proposed creating the External Revenue Service (ERS), an agency dedicated to handling tariffs and international trade revenue. This would replace the current reliance on income taxes, shifting the financial burden to foreign countries through import duties.
However, the plan has sparked debate among economists and policymakers. Critics argue that tariffs could lead to higher consumer prices, as businesses often pass these costs onto customers. Additionally, some question whether tariffs alone could generate enough revenue to fund essential government programs like Social Security and Medicare.
While the idea is ambitious, its success would depend on congressional approval and careful implementation. For now, Trump’s proposal has ignited a lively discussion about the future of America’s tax system and its economic priorities.
