US President Donald Trump has imposed reciprocal tariff on many countries including India. Trump has decided to impose 245% tariff on China. This decision of Trump has increased the risk of ‘trade war’ between America and China.
Trump’s view is that America will benefit tremendously from reciprocal tariffs and other types of tariffs. Not only this, America’s revenue will increase tremendously due to tariffs, due to which income tax in America can be completely abolished.
In an interview to news channel Fox News, Trump patted his government on the back for the tariff policy. He said that tariffs can generate so much revenue that we can completely abolish income tax. There is every possibility that we may abolish income tax due to the huge revenue generated from tariffs.
He further said that we can earn so much revenue from tariff that we can abolish income tax. Giving an example, he said that between 1870 and 1913, tariff was the main source of income for the government and during this period we earned so much money from tariff that we became the richest country.