Don't Expect Tariffs to "Replace" the Income Tax
Americans were duped by the exact same "deal" in 1913, except in reverse.
Many libertarians are buying Trump’s tariff expansion as a “less bad” funding source to “replace” the income tax (similarly to how some libertarians support the UBI as a substitute for the current welfare state). A brief history lesson will hopefully disabuse them of this rationale.
The 1913 introduction of the income tax itself was supported by an earlier American populist movement as a “less bad” funding source to “replace” high tariffs. Unsurprisingly, the government reneged on this “deal” and brought high tariffs back once the income tax was irreversibly established.
Frank Chodorov (the first editor of FEE’s The Freeman) told the tale (and the moral of the story, bolded below) in his book The Income Tax: Root of all Evil:
For this argument the Populists were prepared with their cherished “soak the rich” proposal, the income tax. Hence, the bill of 1894 and the several income-tax bills introduced later, linked tariff reduction with income taxation. Not until the constitutional amendment was passed by Congress was the fiction dropped that tariff reduction and income taxation are related.
The Populists, as do all reformers, assumed that social good can be achieved through political action. They ignored the age-old fact that whenever the government does ‘good’ it acts in the interests of some at the expense of others, meanwhile acquiring power for itself. The end product of government intervention in the economy of the country is more power for government. It never gives up power; it never abdicates.
Hence, the idea that the government would give up tariff revenue in exchange for income-tax revenue was contrary to all experience. It promised to make the swap, and perhaps its leaders believed the promise, but the nature of government is such that it cannot give up one power for another; not permanently, at any rate.
The historic fact is that tariffs rose higher than ever after income taxation was ultimately constitutionalized.