Record Tariffs, Record Deficits: The Fantasy of Eliminating Income Taxes

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Tariffs bringing in “hundreds of billions” sounds impressive—until you compare it to trillion-dollar interest payments and the size of the modern federal government. This episode calls out the magical thinking behind claims that income taxes can be eliminated, and explains why comparing today’s America to the pre-income-tax era is economic nonsense.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Okay, Trump administration is touting they're thrilled they've got record
tariff revenue for the month of October thirty one point
four billion dollars, new monthly record. Yeah. Uh, surpassing all
prior monthly readings and marking the strongest single month tariff

(00:38):
haul since the modern reporting era began. Huh. Now, let
me explain to you something we talked about this last week.
We had record tariff revenue, record tariff revenue for October.
We also had a massive deficit in the month of October. Okay,

(01:11):
so we're still going backwards. Trump was on a Thanksgiving
call with US service members and he said that the
tariff revenue boom could soon allow the United States to
dramatically reduce or even eliminate federal income taxes for many Americans.

(01:35):
We're taking in hundreds of billions of dollars like we've
never done before. The portion of money could be returned
to americans in the form of a dividend, while the
rest would contribute to debt reduction over the next couple
of years, I think will substantially be cutting and maybe
cutting out completely income taxes. Again, Trump talked about this.

(01:59):
This is back in and what was it May or
April April he put out a truth social post that
said Americans earning under two hundred thousand dollars might see
their income taxes sharply reduced or eliminated once the tariff
program reached full effect. Okay, I I want because again

(02:24):
you had a lot of the Trump uh you know,
MAGA influencers, the sick fans online tut this. Why are
more people talking about this? This could be huge? Wow,
I'm begging. Could could you show me your work? Please?

(02:44):
How explain to me the math on this? Explain it
to me. Let's just for for argument's sake, Let's say
tariff revenue goes to one hundred billion dollars a month.
That's one point two trillion dollars a year. It's not

(03:09):
chump change, but it doesn't cover or nut It's not
even close. One point two trillion dollars a year is
what we're spending, right, now on interest payments on our debt.
The only person that's in the history of the planet

(03:30):
that's been able to do something like this was Jesus
with loves and facies. Okay, you're not going to be
able to do this with tariff revenue. You're not, so
why would you talk about this more? It's not mathematically possible.
I used to be you know, it frustrates me. I

(03:52):
used to make fun of liberals with the math that
they would come up with. I caught. We did whole
bits on it on the show Liberal Math. You know,
two plus two equals twenty. How how could you possibly
eliminate the income tax with tariff revenue? What do you

(04:14):
are you planning? What are you planning on charging? Because
they can't be at the numbers that you have right now.
But again, we live in this this world, this world.
I guess if you say things, you say things enough

(04:36):
that you keep repeating the same thing again and again
and again, people just they believe it. It's funny, Buck Sexton,
it's talk radio show host. If I'm not mis staying it,
he's got a new book coming out. If he's reading
a little excerpt from it, had it sent over to me,
and he described it. He described it like this. It's

(04:58):
like if you living in in the if you're living
in the eastern part of the state of Colorado where
the Rocky mountains out there, and you just start, you know,
basically telling people rocky mountains don't exist, Rocky mountains don't exist.
Rocky mountains don't exist, right, and they just don't and people, Okay,
that's rocky mountains don't exist. Then you just start driving
somebody this one day. See they start driving west and

(05:22):
they see the Rocky mountains, and rather than being upset
that they've been lied to, they're actually upset that the
rocky mountains are actually there because they're in their way.
I talk about this all the time, you know, with
crafting narratives, which happens, you know what the media does it,
politicians do it, all this stuff. You have to live

(05:44):
in the real world here. People when you repeat something
or you say something that is just just patently absurd
replacing the income tax, and people say, well, all the
country ran for you know before the income tax was
completely well on terrify. You're gonna compare the United States

(06:05):
of America. Okay, pre income tax that this we were
not an empire power like we are now. Okay, we
didn't take that really start taking that mantle over until
posts World War One. Okay, we didn't have a social

(06:27):
Security program, we didn't have all of these welfare Are
you kidding me? You're comparing apples to oranges for crying now.
It makes no sense, but people bring it up like
it makes sense. Oh, we were in this country, ran
we ran on tiff. We just been in the same country.
Now you think we're gonna go back to that anyally,

(06:48):
I'm sorry. You know, I'm trying to keep my cool
here post Thanksgiving. But the stupidity, quite frankly oftentimes knows
no bounce. Watch Dog on Wall Street dot Com