Trump Aims to Scrap IRS, Shift to Tariffs, Lutnick Says

In a bold move that could reshape America’s tax system, U.S. Commerce Secretary Howard Lutnick declared that President Donald Trump is determined to dismantle the Internal Revenue Service (IRS). Speaking on Fox News’ Jesse Watters Primetime, Lutnick outlined a vision where the federal government would pivot away from income taxes and instead rely heavily on tariffs and other revenue from foreign sources. “His goal is to abolish the Internal Revenue Service and let all the outsiders pay,” Lutnick said, framing it as a way to ease the tax burden on American citizens while making foreign entities foot the bill.

Lutnick, a Wall Street veteran and staunch Trump ally, painted this as part of a broader economic overhaul. He argued that Trump wants to “cut taxes” for Americans and “balance our budget” by slashing what he called “tax scams” that burden the middle class. The plan hinges on creating an “External Revenue Service” to oversee tariffs—a concept Trump has floated before, including during his campaign when he suggested replacing income taxes with levies on imported goods. Lutnick tied this to a trillion-dollar revenue boost, reportedly backed by Elon Musk’s efforts as a senior advisor leading the Department of Government Efficiency (DOGE), which aims to trim $1 trillion in federal spending.

The announcement comes amid reports that the IRS faces massive layoffs, with thousands of jobs allegedly on the chopping block in places like Kansas City, Missouri. A local union official told Axios these cuts align with DOGE’s push to shrink the federal workforce. Lutnick didn’t address the layoffs directly but doubled down on the idea that taxing “outsiders” through tariffs would fund the government, freeing Americans from IRS oversight. Economists, however, caution that such a shift could spike consumer prices, as tariffs often get passed on to buyers, though Lutnick dismissed those concerns as overstated.

Trump’s tariff obsession isn’t new—he’s long championed them as a tool to boost U.S. manufacturing and punish trading partners. Lutnick, confirmed as Commerce Secretary just days ago in a 51-45 Senate vote, is now tasked with turning that rhetoric into policy. His Fox News appearance signals a full-throated commitment to this radical tax experiment, even as critics warn it could upend decades of fiscal norms. For now, the details remain murky—how would tariffs replace the $4 trillion the IRS collects annually? Lutnick offered no roadmap, but his confidence suggests Trump’s team is ready to gamble big. Americans will be watching closely to see if this promise delivers relief or chaos.