Trump Wants to 'Abolish the IRS,' New Commerce Secretary Says

Commerce Secretary Howard Lutnick recently revealed another one of the Trump administration's controversial goals: abolishing the Internal Revenue Service (IRS).

Lutnick revealed that President Donald Trump planned to replace federal funds collected through the IRS with revenue generated through his tariff plan while speaking to Fox News on Wednesday night.

"Donald Trump announced the External Revenue Service, and his goal is very simple: to abolish the Internal Revenue Service and let all the outsiders pay," Lutnick said.

The IRS would be replaced with an "external revenue service" that would allow the US government to somehow derive funding from the governments of other nations.

The US government raises around $3 trillion from income taxes annually, but also imports $3 trillion worth of goods annually. Hence, in order to replace the revenue derived from internal taxes, the government would have to impose 100% tariffs on all imported goods, as reported by CNN.

"The challenge is that it is unclear what will happen to sales if all imported products double in price," Torsten Slok, chief economist at Apollo Global Management, told CNN. "Given higher prices result in lower sales, it may require as much as 200% tariffs on all imported goods for the total tariff revenue to replace income taxes."

Trump spoke about creating an "ERS" in January but did not frame the new institution as a replacement for the IRS. This follows the President's consistent claim that foreign governments will bear the brunt of the cost if the US were to impose tariffs, claims which are not necessarily true.

"The foreign producer has contributed nothing to the growth or development of this country, so if you want to share with the citizens of the United States our home market, then you must pay for the privilege of doing it," he said during a January speech at the Congressional Institute. "In other words, you have to pay for the privilege of coming to our country, of taking our jobs, taking our product, destroying our countries."