Trump plans to replace income taxes with tariffs on foreign imports—eliminating one of the largest lifetime expenses for millions of taxpayers.
This has sparked debate as he claims it will ease workers’ tax burdens.
To understand its potential impact, the Dancing Numbers team analyzed how much the average American pays in taxes over a lifetime and how much they could save if income taxes were replaced by tariffs.
Their findings reveal that the lifetime tax savings for the average American could range from $134,809 (if only federal income tax is eliminated) to $325,561 (if all wage-based income taxes are removed).
Key insights from the study:
- The average American pays $325,561 in lifetime income taxes, contributing to a total average tax burden of $497,804.
- Who Pays the Most? New Jersey residents face the highest lifetime tax burden at $755,493, followed by Connecticut ($686,655) and New York ($674,663) throughout their lifetime.
- If Trump’s tariff plan eliminates federal income taxes, residents could save $146,160 in New Jersey, $149,535 in Connecticut, and $136,215 in New York over their lifetime.
- States That Would Benefit Most: Residents of New Jersey, New York, Connecticut, Illinois, and Massachusetts could experience the most significant tax relief.
With lifetime tax burdens exceeding half a million dollars for many in the form of income, property, and sales taxes, Trump’s proposal could fundamentally shift the financial landscape for millions of Americans.
The complete study on Trump’s Tariff is available here
What is the purpose of this exercise?