Trump’s Tariff Plan Could Slash Lifetime Taxes, Study Reveals

• Tariff-based taxation could cut lifetime tax burdens by up to $325,561 per person.
• A 20% tax refund is proposed to ease the transition before full income tax repeal.
• Trump’s crypto policies may drive U.S. leadership in digital assets and AI sectors.

U.S. President Donald Trump’s proposal to replace federal income taxes with tariffs could significantly reduce tax burdens for American workers. A new study by accounting automation firm Dancing Numbers estimates that the average American could save at least $134,809 over a lifetime if federal income taxes are eliminated. 

If state-level wage-based income taxes are also repealed, lifetime savings could rise to $325,561 per person. The research suggests that individuals in high-tax states like New York, New Jersey, Connecticut, Illinois, and Massachusetts would see the most financial relief.

Tariffs as a Revenue Model

Trump initially proposed eliminating federal income taxes in October 2024, advocating a shift to tariffs on imported goods as a primary source of government revenue. He argued that this system, which funded the U.S. economy in the 19th century, could restore economic independence while reducing financial strain on workers. Supporters believe that removing income taxes could lead to increased market activity, as individuals reinvest their savings into businesses and financial assets.

However, critics warn that tariffs could increase prices for imported goods, placing an additional burden on consumers. Reciprocal trade policies from other countries could further complicate global commerce, potentially raising costs for businesses that rely on international supply chains.

Proposed 20% Tax Refund Before Full Repeal

To ease the transition, Dancing Numbers founder Punit Jindal proposed a 20% “DOGE Dividend” tax refund ahead of the full income tax repeal. This initiative aims to provide immediate relief before the new tariff-based system is fully implemented. The concept is designed to cushion taxpayers from potential disruptions while shifting to a new economic model.

Additionally, Commerce Secretary Howard Lutnick, confirmed in February 2025, voiced strong support for replacing the Internal Revenue Service (IRS) with an “external revenue service” dedicated to tariff collection. Lutnick argued that excessive government spending has placed an increasing burden on taxpayers, and a tariff-based system could promote fiscal discipline.

Trump’s Crypto Plans Gain Momentum

Beyond tax policy, Trump’s stance on cryptocurrency is also shaping financial discussions. Coinbase CEO Brian Armstrong recently noted that Trump’s approach to digital assets has gained significant attention among global market leaders. At the World Economic Forum in Davos, Armstrong observed that many industry leaders were focused on Trump’s regulatory vision for crypto.

Trump has pledged to position the U.S. as a leader in artificial intelligence and cryptocurrency. Speculation has grown around a possible Strategic Bitcoin Reserve, reinforcing his administration’s emphasis on digital assets. As global markets adapt, Trump’s economic policies continue to influence both taxation and emerging financial sectors.