United States President Donald Trump recently announced that federal income taxes could be “substantially reduced” or even eliminated once the tariff regime is fully implemented. In a post on April 27 on Truth Social, Trump specified that the focus of these tax cuts would be on individuals earning less than $200,000 per year. He also mentioned the possibility of funding the federal government only through import tariffs, moving away from the current tax collection model through the Internal Revenue Service (IRS). The elimination of federal income tax could potentially boost asset prices, including cryptocurrencies, as it may lead to an increase in disposable income that could be reinvested. However, the actual impact is uncertain. Trump’s proposal has left analysts and markets skeptical, especially since he previously mentioned the idea of eliminating federal income tax during an appearance on the Joe Rogan Experience in October 2024. Trump believes that reverting to a system similar to the Gilded Age in the 19th century, without a permanent federal income tax, could bring prosperity. Research suggests that Trump’s plan could save the average American significant amounts in lifetime tax payments. Trump’s administration has implemented tariffs on US trading partners but has also backtracked on these policies multiple times, causing volatility in the stock market and criticism from financial analysts. The fluctuating trade policies have led to an increase in US bond yields and concerns about the impact on capital markets. For more insights into market trends, subscribe to our magazine for in-depth analysis.