So far this FY we're at $959 billion in revenue from income tax.
https://tradingeconomics.com/united-states/imports
Those numbers are monthly and include services, but summing up the US imports over the same period (October 2024-February 2025) we get $1.86 trillion dollar. To replace our income tax revenue over this period we'd need a 50% tariff on all imported goods and services.
What level of tariffs should we aim for so that we can reduce our federal income tax rates and increase or maintain overall revenue as you claim will happen?
So this will not bring in more money. All the tariffs are paid from money that already exists in the domestic US economy.
Furthermore, tariffs are passed to consumers. Transitively this is an increased tax burden on consumers. Our taxes have, in effect, gone up.
That’s actually not a crazy assumption for targeted tariffs. Imagine we only added a tariff to German cars. BMW and VW would have to compete with normally priced sedans, and lower their margins.
Of course, that doesn’t work if you tariff 100% of the suppliers of essential goods.
What will keep the US auto makers from just being 5% under the imports' price? They will still win on cost, can blame Trump, and also capture all the money on the table.
Tariffs are taxes. Are you really going to be happy if you pay less in taxes but make up for it by paying tariffs?
But I wouldn't be so quick to rejoice. During Trump's previous term much of the money collected was given to farmers as subsidies for their losses from the counter tariffs.
FWIW, there are proponents of something called Fair Tax, which replaces income tax with a national sales tax. Either 25 or 30% IIRC. I never looked at it to determine if it was viable, but it seemed to have some level of support because I kept seeing it pop up.
From what I can tell, that isn't completely different to the idea of replacing income taxes with tariffs, I guess, except that it doesn't apply to US goods.
I can see that. If more people owe money as opposed to getting a refund, there is more incentive to pay later. If US govt owes you money, you handed Uncle Sam a 0% loan, and then it makes sense to file as early as possible.
This one is interesting:
> Refusing to file in protest: Every year, a small number of filers politically object to filing and paying taxes for different reasons. This year is no different.
> Olson said someone recently sent her a letter in the mail containing a copy of an angry letter they had sent to Treasury Secretary Scott Bessent. “It said they didn’t want to file their tax return and pay taxes because they were upset that the Trump administration was trying to breach taxpayer confidentiality,” Olson said.
That's happening with one of my acquaintances. They canvassed for Harris and were quite upset at the loss. As a form of protest they won't be filing their taxes. I don't know what happens then, I am not bold enough to try it myself. Even if a more friendly administration returns after 4 years, will they be willing to amnesty people who took this route. I wouldn't bet on it, and I don't see millions of people going for that option somehow, either.
An extension doesnt change when the taxes are due.
Maybe it about not wanting to eat stock loss yet having to sell in what looks like a bad market if they plan on using that to pay taxes.
Most people would fall under the "underpayment" scenario since taxes are deducted on their W2, which is just interest on the underpayment.
Providing a free service to make Americans' lives easier is not part of the business plan for the current administration. Scott Bessent only committed to keeping it available for the current tax season during his Treasury Secretary confirmation hearings.
- What DOGE (allegedly) did, the GSA's + 18F's role in DirectFile, who is Scott Bessent: https://x.com/i/grok/share/HPCbOS8C5MCC7Uvwok2bg6uIk
- It `felt` like an attack but I couldn't articulate it: https://chatgpt.com/share/67f47c39-1e98-8003-a072-2c083fbe9b...
Trump administration plans to end the IRS Direct File program for free tax filing, AP sources say https://apnews.com/article/irs-direct-file-tax-returns-free-...
For instance, it responded: "it tries to delegitimize the IRS program by associating it with political actors assumed to have bad motives."
Scott Bessent is inherently associated with the IRS and its programs in his official capacity. If he has bad motives, I didn't say it.
- Has there ever been an instance quoted anywhere that said: "In this house we believe that: simplistic platitudes, trite tautologies, and semantically overloaded aphorisms are poor substitutes for respectful and rational discussions about complex issues."?
Trump administration plans to end the IRS Direct File program for free tax filing, AP sources say https://apnews.com/article/irs-direct-file-tax-returns-free-...
To properly file taxes when living abroad, you usually file a tax return in your country of domicile first and then transfer select facts to the American one for credits, deductions, and other offsets.
All of this means minimally doing two tax filings. So: there you go. Heaven help you if you ever live in a place where the tax window is incompatible with the American ones.
The lack of matchup between the UK tax year from 6-Apr to 5-Apr against the US tax year of 1 Jan to 31 Dec is the bane of my existence.
If you're moving after April 6th you're probably going to be fine on the UK side. If you have any US income in the tax year you can claim either split year (on the foreign pages) or treaty residence (using hs302) in the US up until you move (assuming you file Self Assessment, most PAYE employees don't, though you strictly should given the foreign stuff). HMRC is way nicer and easier to work with than the IRS. It's a breath of fresh air. This is pretty simple, but UK accountants are also pretty cheap.
The trouble is on the US side. If you're an American citizen you are liable to pay US taxes on all your income. If you're outside the US for most of the tax year, you can claim the FEIE and if you make less than ~$130,000, you have little else to do. If you're PAYE in the UK, you can claim the FTC on the cash basis in the US and you will probably also be fine. This is all fairly simple to do, and depending on your comfort levels you can probably do it in TaxAct or myExpatTaxes online. You also need to file FBARs and possibly 8938s every April. The trouble is if you are a sole trader or similar in the UK. This makes the FTC really hard. You will probably want a US accountant with knowledge of foreign tax if you are self-employed. Buzzacott is a firm I have seen do some good work for friends of mine with complex US and UK tax filings (though I have not personally used them). You can expect to pay thousands of dollars in tax prep fees every year if you use an accountant. This stuff seriously exceeds the knowledge of most US CPAs, so you will need someone who specifically advertises this.
Also as an American you need to avoid pretty much all of the useful tax-planning tools here in the UK. You can't really have a S&S ISA, or any other kind of tax-advantaged account other than a workplace pension without it all going totally bananas on the US side. You also can't own a UK limited company (more than ~10%) without getting whacked with crazy 5471 reporting. Same applies to UK trusts, you can't touch them without 3520 reporting (even for trivial things like life insurance trusts here in the UK, and even certain pension products). Many banks and financial services providers won't touch Americans with a 10 foot pole.
On the other hand you can potentially save a lot in taxes if you ever move back to the US if you've accumulated a lot of FTC carry forward. You can also probably pay a pretty minimal amount of US student loans if you're on IBR because the payments are based on your AGI which will be artificially low.
The US needs to abolish citizenship based taxation and chill out on the reporting requirements (which are generally the worst part) for people who generally live abroad. However, I wouldn't hold my breath. Even though the current admin has said they'll get rid of it, I just don't see that there's much political capital to spend on this issue. There aren't that many Americans living abroad, and most Americans don't give a shit about this sort of thing.
This year, maybe because the IRS is gutted the extensions wouldn’t be manually reviewed and a reduction in audits?
except now, I guess...
So you file the extension and sort out the rest later. I have in the past filed the extension (to lock in the extension date), then just days later filed my 1040 - because for once it happened to be ready early.
If you file your 1040 package without having filed for extension, you forfeit that later deadline for the rest.
This time around, it's a cheap casino bet that the IRS will be totally abolished by the end of the year. Approach random systems with random strategies.
let's hope their investment isn't the S&P500
> Fear of deportation: Undocumented immigrants register with the IRS and pay billions of dollars in taxes every year. Multiple sources said members of this community might be holding back during this tax season, as the Trump administration tries to use IRS data to facilitate deportations