Exploring the End of Income Tax? Economist Peter St. Onge Weighs In

In a recent interview with Joe Pags, economist and Heritage Foundation visiting fellow Peter St. Onge explored alternatives to federal income tax, which former President Trump mentioned could be reconsidered under his administration. The conversation highlighted how a tariff-based revenue model might work as an alternative, alongside a reduction in government spending.

St. Onge explained that tariffs historically supported the U.S. government before income tax was introduced, noting, “One of the least damaging taxes of all is a tariff; one of the worst taxes of all is an income tax.” He discussed how tariffs, which impose fees on foreign goods entering the U.S., could help reduce income tax pressures on Americans, ultimately benefiting domestic businesses by making their products more competitive.

Tracing the history of income tax, St. Onge described how it was initially aimed only at the wealthiest but gradually expanded to cover most American workers. He explained that taxing income discourages productivity and growth by penalizing earnings, a system he argues could be reshaped to create more economic opportunities. St. Onge’s preference for tariffs stems from the belief that they “level that playing field” for U.S. companies.

Pags raised a practical concern about funding today’s federal budget through tariffs alone. St. Onge acknowledged that tariffs might not cover the entire budget, suggesting that a combination of reduced spending and other revenue sources would likely be needed to replace income tax fully.

For a more detailed look into how St. Onge envisions the potential shift and its impact on American workers and businesses, catch the full conversation with Joe Pags below, where they dive deeper into tariffs, income tax history, and economic policy shifts.