Commerce Secretary Howard Lutnick has revealed an ambitious tax proposal supported by President Donald Trump that could eliminate income taxes for most Americans.
During a recent podcast appearance, Lutnick described a conversation where he pitched the idea of waiving all income taxes for individuals earning less than $150,000 annually – a move that would cover roughly 85% of Americans.
According to Lutnick, Trump immediately agreed to the concept on one condition: that the federal budget could first be balanced.
Lutnick emphasized that this radical tax reform aligns with Trump’s vision of restoring America’s economic foundation. He pointed to the nation’s pre-1913 history when the U.S.
operated without income taxes, funded instead by tariffs during its period of rapid growth and prosperity. “America was built on tariffs with no income tax,” Lutnick noted, referencing the era from 1880-1913 when the government reportedly struggled to spend its surplus funds.
The Commerce Secretary outlined additional potential tax changes being considered, including eliminating taxes on tips and overtime pay, along with removing Social Security payroll deductions (while maintaining benefits).
Lutnick described these proposals as potentially transformative for American workers, claiming they would stimulate economic growth and domestic manufacturing.
While acknowledging these policies might cause short-term economic turbulence, Lutnick argued this would primarily stem from reversing what he called “Biden nonsense” rather than the proposed reforms themselves.
He maintained that Trump’s tax vision would ultimately generate revenue through economic expansion and renewed domestic production.
The proposal represents one of the most dramatic tax overhaul concepts in modern political discourse, though its implementation would require significant budgetary adjustments.
Lutnick’s comments suggest the Trump administration is developing bold economic policies for a potential second term, with this tax plan positioned as a centerpiece initiative aimed at directly benefiting working-class Americans.
