In a typical short-on-details, big-on-claims Truth Social post on Sunday, President Trump touted a ‘make-believe’ tax benefit that could come from his chaotic tariff plan.

Trump stated that “when Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year … It will be a BONANZA FOR AMERICA!!! THE EXTERNAL REVENUE SERVICE IS HAPPENING!!!”

Big claims – with no empirical evidence or plan to support them.

First, when they ‘cut in’ – as they are already beginning to do so – tariffs raise consumer prices.

This price inflation affects all consumers, regardless of income level. All will pay higher prices.

As noted in a previous story (see: Manufacturer lobby group), higher prices will disproportionately affect lower- and middle-class households, as they have less disposable income to spend on the higher cost of goods, which inherently makes their household budget tighter and puts them in a more precarious position.

Even with a tax cut – or the elimination of income tax altogether – the shortfall for most families is not offset.

Remember that roughly 47% of U.S. households pay no Federal income tax, because they already do not earn enough.

Furthermore, governments historically have moved to income tax as their chief source of revenue, over other taxation policies, such as tariffs, because income taxes are much steadier and reliable.

You don’t have to worry about the whims of foreign governments and foreign consumers.

But even more silly is the idea that Trump could eliminate income tax for those making under $200,000 per year.

Currently, almost 50% of the Federal Government’s total revenue is received from individual income tax.

In 2024, the United States Government collected approximately $2.4 trillion alone in revenue from individual income tax.

Of that, over half is paid by income earners with incomes falling into the bottom four brackets – individuals making less than $250,000 annually.

If Trump eliminated taxes on individuals making less than $200,000, the shortfall would be over $1 trillion. That is far more than the $263 billion in ‘estimated tariff benefit’ that Trump’s Administration used as a basis for their tariff policy.

How exactly does Trump propose to make up the difference?

He has no idea. It is all just make-believe.

Clearly, the new ‘External Revenue Service’ has its work cut out for it if Trump continues pushing fairy tale policy ideas without any understanding of government revenue.

A bonanza of stupidity is about all the American people can expect.