Focus on the BIG picture.
Wednesday, Jan 15, 2025
Outside the box.
Trump Suggests Establishing a New Agency to Gather Revenue from International Sources
President-elect Donald Trump declares the establishment of the 'External Revenue Service' to handle tariffs and duties, indicating a change in U.S. trade policy as his inauguration nears.
On Tuesday, President-elect Donald Trump announced plans to establish a new government agency called the 'External Revenue Service' to gather tariffs, duties, and other income from international sources.
This announcement comes as he plans to introduce new import tariffs when he begins his second term on January 20. Trump, in a post on Truth Social, argued that Americans have long been overburdened by the Internal Revenue Service, and suggested that foreign entities profiting from U.S. trade have not been contributing their fair share.
The proposal implies a significant overhaul of U.S. revenue collection, focusing on international sources, although specifics are still unclear.
Trump did not specify whether this new agency would take over the tariff collection role of U.S. Customs and Border Protection or the IRS’s role in collecting taxes on foreign corporate and individual income.
The announcement has sparked concerns about the potential for expanding government bureaucracy, which may contradict Trump's prior efforts to streamline government functions, such as his informal Department of Government Efficiency led by Elon Musk and Vivek Ramaswamy.
Trump's idea to replace income taxes with tariffs, a topic he discussed during his campaign, has faced skepticism.
Economists, including those from the Tax Foundation, contend that a 20% tariff would produce significantly less revenue than the current tax system, with projections indicating $3.3 trillion over a decade compared to the IRS's yearly revenue of up to $18 trillion.
Senator Ron Wyden, the leading Democrat on the Senate Finance Committee, condemned Trump's proposal, labeling it a concealed tax increase on American families and small businesses.
Trump has proposed specific tariff rates, such as a 10% tariff on all global imports, a 25% tariff on imports from Canada and Mexico, and a 60% tariff on Chinese products.
Experts caution that these tariffs could disrupt trade, raise costs, and trigger retaliatory measures against U.S. exports, complicating the U.S. trade environment further.
This announcement comes as he plans to introduce new import tariffs when he begins his second term on January 20. Trump, in a post on Truth Social, argued that Americans have long been overburdened by the Internal Revenue Service, and suggested that foreign entities profiting from U.S. trade have not been contributing their fair share.
The proposal implies a significant overhaul of U.S. revenue collection, focusing on international sources, although specifics are still unclear.
Trump did not specify whether this new agency would take over the tariff collection role of U.S. Customs and Border Protection or the IRS’s role in collecting taxes on foreign corporate and individual income.
The announcement has sparked concerns about the potential for expanding government bureaucracy, which may contradict Trump's prior efforts to streamline government functions, such as his informal Department of Government Efficiency led by Elon Musk and Vivek Ramaswamy.
Trump's idea to replace income taxes with tariffs, a topic he discussed during his campaign, has faced skepticism.
Economists, including those from the Tax Foundation, contend that a 20% tariff would produce significantly less revenue than the current tax system, with projections indicating $3.3 trillion over a decade compared to the IRS's yearly revenue of up to $18 trillion.
Senator Ron Wyden, the leading Democrat on the Senate Finance Committee, condemned Trump's proposal, labeling it a concealed tax increase on American families and small businesses.
Trump has proposed specific tariff rates, such as a 10% tariff on all global imports, a 25% tariff on imports from Canada and Mexico, and a 60% tariff on Chinese products.
Experts caution that these tariffs could disrupt trade, raise costs, and trigger retaliatory measures against U.S. exports, complicating the U.S. trade environment further.
