Trump has announced his intent to abolish income tax. Today’s show breaks down the history of income tax in America and why it’s possible to abolish it.

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"This proposal is the kind of proposal that can only happen in a Trump second term,” Crowder said. “Most people would say this is political suicide.”

About 40 percent of American households pay no individual income tax.

“We also are dealing with the problem of mob rule, which is the problem with a pure democracy. The 40% of people who don't pay any federal income tax will typically vote for the 60% to pay more,” Crowder said. “I would also argue that taking money from someone else, especially income that they have worked to earn, can arguably be a form of indentured servitude.”

According to Financial Express

In a bold move to reshape the U.S. tax system, President Donald Trump on Monday proposed abolishing income tax for American citizens, aiming to increase disposable income for families and individuals. Describing the initiative as a return to the principles that historically drove national prosperity, Trump outlined his vision during a House Republican Members Conference.

“It’s time for the United States to return to the system that made us richer and more powerful than ever before,” Trump stated, emphasizing a shift from taxing citizens to imposing tariffs on foreign imports.

The proposal includes replacing income tax—a key contributor to federal revenue—with tariffs on imported goods. Trump cited the period between 1870 and 1913 as an example of economic success driven by tariff-based revenue generation. He highlighted the wealth and growth achieved during that era, arguing that the strategy could once again bolster the U.S. economy.

Before the Civil War, the federal government relied on tariff-based funding.

In 1895, the United States Supreme Court declared that federal income tax was unconstitutional.

“For a huge portion of the history of this country, we did not have it. And the Supreme Court said it is unconstitutional. Then in 1913, the 16th Amendment was ratified to overcome that Supreme Court decision. Then, Congress immediately passed the Revenue Act of 1913, and it established a permanent federal income” Crowder added.

Taxes were then increased to fund world wars. In World War I, the top marginal tax rate reached about 77 percent, and in World War II, it reached 94 percent.

“Nobody should ever pay those rates,” Crowder said.

The highest marginal tax rate is 37 percent as of 2025. In 2023, the government collected about $4.47 trillion in revenue from taxes.

“Half of all the annual revenue collected by the federal government is your income tax,” Crowder added. “We can either raise the age or change Social Security. At some point, there's going to need to be some kind of reform.”

The military defense budget is $820 billion. Income security, such as food stamps, is $775 billion. The government also spent $658 billion on interest debt costs.

“That's not something that even creates any value, it's basically a punishment,” Crowder said.

Besides reducing spending, another way the government could fund itself is by generating other revenue, such as a consumption tax.

“If you pay no income tax, you'll end up paying some tax when you purchase goods. When you consume products, goods, or services in that way, you have more choice over the amount of taxes that you pay,” Crowder said. “It gives you the choice to save even more because it's not being taken out automatically.”