Grant Cardone, the well-known entrepreneur and real estate mogul, has stirred up social media with his bold call to “cut federal taxes to zero.” Cardone, famous for his no-nonsense opinions on money and business, believes that eliminating federal taxes could unlock what he calls an “age of prosperity and affluence” for the United States and that the people know better how to invest their money than the government.
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Social media users had mixed reactions, with some supporting the idea of replacing income taxes with tariffs. One user even suggested using a simple sales tax and tariffs to pay for federal expenses.
Donald Trump, the president-elect, has expressed interest in replacing federal income tax with tariffs. He has suggested imposing high tariffs on commodities from other nations, especially China.
According to the Tax Foundation, implementing universal tariffs could generate substantial revenue. Estimates suggest that a 10% universal tariff might bring in about $2 trillion over a decade, whereas a 20% tariff could raise approximately $3.3 trillion. However, these tariffs would also mean higher costs for U.S. households, with a 10% tariff potentially increasing household expenses by over $1,200 annually and a 20% tariff raising them by over $2,000.
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The reality is, moving from an income tax system to one funded entirely by tariffs and sales taxes would be a massive shift – one that would require significant changes in law and support from both houses of Congress.
Experts like Kimberly Clausing of the Peterson Institute for International Economics have voiced concern over such proposals, calling them potentially the most “inflationary platform” in recent years. The big worry is that without federal income taxes, the government would need to cut crucial programs like Social Security, health care or military spending. This is exactly what Musk’s and Ramaswamy’s newly minted commission is tasked with reviewing.