Former President Donald Trump has unveiled an ambitious plan to eliminate the Internal Revenue Service (IRS) and completely change the way the U.S. government collects taxes. Instead of taxing American citizens directly, Trump wants to fund the government through tariffs and foreign-sourced revenue. This move could dramatically alter the country’s tax system and how the government operates.
Goodbye IRS, Hello ‘External Revenue Service’
As part of his proposal, Trump plans to replace the IRS with a new agency called the External Revenue Service (ERS). Instead of collecting taxes from individuals, this agency would focus on revenue from trade tariffs, duties, and fees on imported goods.
In a statement, Trump criticized the traditional tax system, calling it unfair to American workers. “We are going to stop punishing hardworking Americans and start making foreign countries pay their fair share,” he said.
The ERS is expected to launch as early as January 2025 if Trump wins re-election.
Higher Tariffs on Foreign Goods
To compensate for the loss of income tax revenue, Trump’s plan includes massive tariff increases on goods imported from China, Mexico, and Canada. The goal is to encourage businesses to manufacture products in the U.S. rather than relying on cheaper foreign labor.
Critics argue that higher tariffs could lead to increased prices for everyday goods, affecting American consumers. However, Trump insists that this strategy will bring back jobs and strengthen the economy.
IRS Hiring Freeze – What Happens to 90,000 New Agents?
In another major move, Trump has frozen hiring at the IRS, halting the onboarding of nearly 90,000 agents who were set to be hired under President Biden’s Inflation Reduction Act.
Trump has even suggested reassigning these agents to border security, stating that they could help enforce immigration laws. Some have raised concerns about this idea, especially since the agents were originally hired for tax enforcement, not border security.
A New IRS Commissioner – But With a Twist
Trump has also nominated former Congressman Billy Long to be the next Commissioner of the IRS. However, Long has long been an advocate for abolishing the IRS entirely and replacing it with a flat tax system.
His nomination has sparked mixed reactions. Supporters believe he will push for a fairer tax system, while opponents worry about the consequences of dismantling the IRS without a clear replacement strategy.
What Happens Next?
While Trump’s plan is bold, it won’t happen overnight. Congress would need to approve major changes to the tax system, and experts warn that relying solely on tariffs could have unpredictable consequences for the economy.
As the debate heats up, one thing is clear – if Trump’s proposal moves forward, it could be one of the most significant tax policy changes in U.S. history.
