Study: How Much Americans Can Save on Taxes If Tariffs Take Over

President Donald Trump has long supported tariffs over taxation to fill the public coffers.

To date, numbers assessing the United Statesโ€™ move to a revenue system based on import tariffs have been scarce, especially compared to the taxation model the country has experienced since 1862.

Now, the numbers are starting to flow in.

Exhibit A is a new study from Dancing Numbers, a Delaware-based bookkeeping and accounting workflow platform, that shows the potential lifetime savings Americans would garner if Uncle Sam switched from an income tax-based levy system to a tariff-based policy.

According to Dancing Numbers, taxpayers would benefit financially from the tariff-based system.

If Trumpโ€™s tariffs replaced income taxes, โ€œan average American could save $134,809 in federal taxes, with potential savings reaching up to $327,106 if all wage-based income taxes were eliminated, effectively eliminating their entire income tax burden,โ€ the study reported.

The study says that the average U.S. taxpayer pays the latter amount of $325,561 throughout his or her lifetime in income taxes. Other taxes bring that number up to $497,804, representing 26.7 percent of $1.87 million in lifetime earnings.

Property ($132,981 for a lifetime) and vehicle taxes ($5,843 for a lifetime) would not be impacted by a shift to tariffs, the study noted.

5 States Where Taxpayers Benefit Most from Tariffs

Four Northeast states and one Midwest state would see the biggest benefit of a tariff over a tax levy system, according to Dancing Numbers. New Jersey tops that list with a lifetime total tax of $755,493, or 38.5 percent of the average Garden State citizenโ€™s lifetime income.

Connecticut (34.5 percent), Massachusetts (32.86 percent), New York (35.9 percent), and Illinois (33.87 percent) make up the rest of the top five states that benefit the most from a tariff-based policy.

High state taxes are a big reason why taxpayers in high-tax locales like New York and California (30.9 percent) are pulling up stakes and moving to tax-friendly states like Florida (with an average 27.1 percent lifetime tax income rate) and Texas (26 percent). That trend would likely accelerate the Dancing Numbers study noted.

โ€œIf Trumpโ€™s proposed tariffs lead to lower federal taxes, this could further incentivize migration by making the overall tax gap between states even more pronounced,โ€ the study reported. โ€œWealthy individuals, small businesses, and millennials looking for financial relief may find relocating even more compelling, boosting no-income-tax states like Florida and Texas.โ€

Byย Brian O’Connell

Read Full Article on NTD.com

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