Trump Proposes Income Tax Cut To Offset Impact of Tariffs, Says 'We Will Make A Lot Of Money'

Amidst talks of an impending trade war as well as trade agreements with several countries, the United States president Donald Trump said that the country is going to make a lot of money on Monday.

"We are going to make a lot of money, and we're going to cut taxes for the people of this country" through income from tariffs, Trump said while he was on his way back to Washington from his golf club in New Jersey.

He also added that it'll take a little while before they do that.

Who Is Trump Reducing Income Taxes For?

On April 27, Trump suggested that his sweeping tariffs would help him reduce income taxes for people making less than $200,000 per year, as public anxiety is getting momentum due to his political agenda.

Previously, he had argued that tariff revenue could replace income taxes, though economists have questioned those claims.

"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 US$200,000 a year," he said on his Truth Social network.

Trump Administration's Stance On Tariffs

The Trump administration's stance on tariffs has stirred markets, leading to fears of higher prices for Americans, prompted recession warnings and sparked concern about the United States' haven status, which is a fear that Treasure Secretary Scott Bessent venerated in an interview on April 27, 2025.

Bessent said that it is not necessarily losing confidence, adding, "anything that happens over a two-week, one-month window can be either statistical noise or market noise."

According to him, Trump's administration is "setting fundamentals" for investors to know "that the US government bond market is the safest and soundest in the world," he said.

Trump wants to extend reductions in income tax that were approved in 2017 during his first presidency, many of which are due to expire at the end of 2025.

He further proposed expanding tax breaks, including by exempting workers' tips and social security earnings, while also reducing the corporate tax rate to 15% from 21%.

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