U.S. Federal Budget and Taxes

Treasury and budget data show tariff revenue is far too small to substitute for federal income taxes — FY2025 tariffs are about $195 billion versus roughly $2.7 trillion in annual individual income taxes, and the Tax Foundation estimates current tariff policy would raise about $2.1 trillion over 10 years versus roughly $32 trillion in individual income taxes, calling full replacement "mechanically impossible." Analysts also note a $2,000 "tariff dividend" would cost $300–$600 billion (more than current tariff receipts), a tariff-funded tax cut would mainly benefit high earners, and any such shift would require Congress to rewrite the tax code and faces pending legal challenges.