President Donald J. Trump has adopted tariffs as a means to both get foreign nations to square up their trade deficits with the US and to help pay down US debt.
His tariff policy is currently being argued in front of the Supreme Court of the United States to determine if he has the authority to place tariffs on foreign goods.
The legacy media and Democrats have, in their usual manner, conspired to convince the voting public that these policies are bad and will hurt everyone including grandma and the children who are already starving (Democrats words) due to the government shutdown and is being blamed on Republicans. Same old, same old, in American politics.
But that’s not the crux of what I want to write about today.
Today I want to make the case for tariffs.
Tariffs have been a main source of federal revenue for much of U.S. history, especially in the 19th century. From the founding through the Civil War, customs duties (tariffs on imports) were overwhelmingly the federal government’s primary revenue engine. From the 1790s–1860s: Tariffs often made up 80–95% of total federal receipts. Even after the Civil War introduced broader excises, tariffs remained the largest single source until 1913. From 1866–1913 tariffs averaged 48–50% of federal revenue. Combined with alcohol and tobacco excises (~40–45%), these indirect taxes funded nearly all government operations.
The shift away from tariff dominance only fully occurred after World War I, when income taxes—expanded dramatically under wartime exigency—became the backbone of federal finance.
So why wouldn’t a tariff based revenue system work now?
Reverting to them as the primary revenue source today—replacing the ~$2.2 trillion in individual income taxes collected in FY 2023—faces massive structural hurdles that didn’t exist back then. The U.S. economy has ballooned in size and complexity, government spending has exploded (from ~$0.7 billion in 1913, or about 2.5% of GDP, to $6.8 trillion today, or ~25% of GDP), and global trade rules make unilateral shifts dicey. Even with America’s market leverage as the world’s largest importer (~$3.8 trillion in goods annually), economists across the spectrum (from Cato to Peterson Institute) call this “mathematically impossible” without catastrophic side effects.
Those reasons are valid ONLY if you are resigned to the current system which is bloated, far too complex, and frankly corrupt for those very reasons.
What if the federal government did ONLY what the constitution directly gives it power to do and it let the states handle the rest? Could federal revenues from tariffs satisfy those federal responsibilities while letting the states generate the revenue they need independently?
If the federal government shrank to its strict constitutional duties—post offices, patents, coinage, courts, military, interstate commerce, foreign affairs—and offloaded everything else (education, welfare, healthcare, infrastructure, pensions) to states, could tariffs (or other simple revenues) fund that leaner core without an income tax?
Short answer: Yes, absolutely—in theory, and with room to spare. The math works easily, and it aligns with how the U.S. operated for its first 130 years. The modern bloat is the problem, not the revenue model.
What Does a “Constitutional-Only” Federal Budget Look Like?
Using fiscal year 2023 as a baseline ($6.8 trillion total), strip out everything not explicitly authorized:
National Defense $820B Yes Art. I, §8 (raise armies, navy)
Interest on Debt $660B Yes (implied) Necessary to function
Veterans Affairs $300B Yes Art. I, §8 (care for troops)
Federal Courts / Justice $80B Yes Art. III
Treasury / Coinage / Debt $150B Yes Art. I, §8
State Dept / Foreign Affairs $60B Yes Art. II
Post Office (self-funded, but count ops) ~$80B Yes Art. I, §8
Patents / Census / Standards ~$20B Yes Art. I, §8
Subtotal: Constitutional Core ~$2.17T
Now remove the rest (68% of budget): Social Security ($1.4T) → states or private, Medicare/Medicaid ($1.6T) → states
Education ($180B) → states, Welfare/SNAP ($800B) → states/charity, Highways/Transit ($120B) → states/tolls, EPA, Energy, HUD, etc. → gone or state-level.
Constitutional federal budget: ~$2.2 trillion max.
Could Tariffs + Simple Revenues Cover $2.2T?
Yes—easily, even at moderate rates.
Tariffs (15% average on $3.8T imports) $570B Current avg ~2% → $80B. 15% is high but doable (pre-WTO norm).
Excise Taxes (alcohol, tobacco, fuel) $150B Already collect ~$100B; modest hikes.
Corporate Income Tax (15% flat, no loopholes) $350B Current ~$420B at 21%; simplify + lower rate.
Asset Sales / Land Leases (one-time or annual) $50–100B Federal lands, spectrum, etc.
User Fees (patents, ports, courts) $50B Already ~$30B; expand.
Voluntary “Liberty Bonds” or Donations $10–50B Patriotism + tax-deduction incentive.
Total $1.2T – $1.6T base Surplus at lower rates
To hit $2.2T? Just raise tariffs to ~25–30% average (still below Smoot-Hawley peaks) or keep a minimal flat income tax of 5–8% on high earners only. But tariffs alone could cover 25–30%, and the rest via simple, visible, non-invasive levies.
Historical Proof: It Worked When Government Was Small
1800 ~2% 90% tariffs No
1860 ~2% 80% tariffs No
1900 ~3% 50% tariffs + 40% excises No
1913 ~2.5% 50% tariffs + excises Just introduced
Why Don’t We Do It? (The Real Barriers)
It’s not economics—it’s politics and path dependence:
Entitlements Lock-In 100M+ Americans depend on SS/Medicare. Phasing out = political suicide.
State Capacity Gap Some states (CA, TX) could absorb duties; others (WV, MS) couldn’t without collapse.
Debt Inertia $36T debt means $660B/year interest—can’t default without chaos.
Global Trade Rules WTO limits tariffs; exiting = trade war.
Public Expectation Voters want federal “help” even if unconstitutional.
A Realistic Path If We Have The Grit
We could transition over but it might take 20 to 30 years to get there.
- Cap federal role via constitutional amendment (e.g., “Sunset Clause” for non-enumerated programs).
- Block-grant entitlements to states with phase-out.
- Replace income tax with 20% tariff + 10% national sales tax (or excise bundle).
- Privatize Post Office, Amtrak, federal lands.
- Let states compete—low-tax ones win migrants/business.
Result: Federal budget < $2T, funded by trade/usage, not coercion.
Final Verdict
This concept isn’t bad—it’s historically proven. The Founders ran a thriving nation on tariffs and excises because the federal government did what the constitution dictated and nothing more, allowing the states their autonomy to take care of their needs. I understand the states would take on a much larger burden, but people are ingenuitive and with 50 independent “laboratories” working on ideas to provide their residents with needs rather than wants, I believe everyone would be better served and state and local politicians would be better monitored by the people when there isn’t a giant federal pot of gold to dip into on a whim.
Today, the size of government, not the revenue tool, is the disease. A disease one party seems particularly fond of…
