All of us with older cars, but not enough to buy a newer one right now, are watching Donald J. Trump's latest tariff move. What he sees at Liberation Day on April 3, could mean we drivers are stuck dealing with aging autos for a bit longer.
Trump's convinced that his latest trade war volley, a 25 percent tariff on foreign-made vehicles and parts, will lead to a fundamental transformation of the U.S. economy. A lot of people, both economic experts and U.S. consumers agree, but not in the same positive reconfiguration that the 47th president sees.
One of the biggest changes ultimately could be the country's tax system.
A doomed tax code? Howard Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center (TPC) at the Urban Institute, takes a look at that possibility in his recent piece for the TPC's TaxVox blog, We May Be Watching The Death Of The Federal Income Tax.
Gleckman examines the roles that tariffs and domestic consumption taxes advocated by, among others, Project 2025 creators and former U.S. Rep. Billy Long, nominee to take the Internal Revenue Service commissioner seat, could play in unraveling the tax code.
"Congress isn’t going to vote any time soon to explicitly replace the income tax with a consumption levy," writes Gleckman. "But aggressive efforts to dismantle the IRS combined with a hollowing out of the income tax base could render the existing revenue system unsustainable. And drive lawmakers to replace it with something else."
One of the biggest dangers here, Gleckman notes, is that "destroying the existing tax system before a replacement is carefully crafted and without first developing a transition plan is dangerous and doomed to fail."
As an aside, I'm also wondering about the majority of states that have an income tax. Most of them use their taxpayers' federal income tax information as part of the state-level collection process. Would the end of Uncle Sam's income tax push more states to eliminate theirs, too?
Gleckman's analysis earns this weekend's Saturday Shout Out.
Since I've already read it, I'm going to spend the rest of the weekend looking for a good local auto mechanic. And maybe surf some used car websites.
You also might find these items of interest:
- How your state pays for its roads
- Want an EV? Buy before Trump eliminates the tax credit
- Business mileage tax deduction rate goes up in 2025, other three are unchanged
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