By John Q. Hosedrinker 
This section explores potential pitfalls and challenges. The article will delve into various scenarios and their possible negative consequences. Readers are encouraged to submit any relevant information. Further details and analysis will be provided in the subsequent sections. The goal is to offer a comprehensive understanding of potential risks and issues.
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Trump’s new cabinet pick has revealed a plan to “abolish” the IRS, a proposal that has sparked considerable debate and apprehension. This plan hinges on replacing income tax revenue with significantly increased tariffs, an approach fraught with economic and logistical challenges. The sheer scale of the undertaking is immediately apparent when considering the massive discrepancy between current tariff revenue and the total annual income tax revenue. Replacing trillions of dollars in income tax with a relatively minuscule amount collected through tariffs is simply not feasible without dramatically impacting the American economy.
The proposed “external revenue service” aims to somehow force other countries to fund the U.S. government through these increased tariffs. However, this misunderstands the fundamental nature of tariffs: they are paid by American consumers, not foreign entities. This means the burden of funding the government would simply shift from income taxes to inflated prices on imported goods, leading to a regressive tax system that disproportionately affects lower-income individuals and families.
The plan’s proponents suggest that this tariff increase would generate a trillion dollars in revenue. This figure is not only wildly optimistic, but it ignores the basic economic principles at play. The argument that tariffs will “bring manufacturing back to the USA” is contradictory to the proposed revenue generation from tariffs. If successful, the return of manufacturing would drastically reduce the amount of imported goods, thus minimizing tariff revenue. Essentially, the plan is predicated on a success that would simultaneously negate its primary funding mechanism.
Furthermore, the idea that the rest of the world would passively allow the United States to impose such high tariffs without retaliation is naive. International trade relations are complex, and such a unilateral move would likely trigger retaliatory tariffs from other nations, further harming the U.S. economy and potentially leading to trade wars. This approach completely disregards the interconnectedness of the global economy and the potential for negative repercussions on international relations.
The plan also fails to account for the substantial role the IRS plays beyond tax collection. The agency manages a vast array of essential functions related to tax enforcement, compliance, and the distribution of vital government services. Simply abolishing the IRS without a clear alternative plan for these functions would create significant administrative chaos and logistical nightmares.
Beyond the economic and logistical flaws, the entire proposition is politically questionable. The idea that the government could simply raise massive revenue from increased tariffs without impacting the prices of goods and services is highly improbable. This could lead to a significant decrease in consumer spending, creating a ripple effect across the economy.
Moreover, the assumption that a substantial amount of waste and fraud can be eliminated to offset the revenue shortfall is unrealistic. While certainly, areas of inefficiency exist, the scale of such purported fraud is debatable and certainly not sufficient to solve a multi-trillion-dollar funding gap.
In essence, the plan to abolish the IRS and replace it with an “external revenue service” funded by dramatically increased tariffs appears to be a poorly conceived and economically unsound policy. It fundamentally misunderstands how international trade and taxation work and would likely result in economic instability, international tension, and significant social disruption. Rather than a solution, this proposal seems more akin to a reckless gamble with the nation’s financial stability.
The plan’s reliance on unrealistic assumptions, its neglect of fundamental economic principles, and its potential for creating widespread economic and political instability cast serious doubt on its viability. Its proponents fail to provide a comprehensive plan for addressing the substantial logistical and economic hurdles this endeavor would inevitably create. The plan raises serious questions about its feasibility and its potential consequences for the American economy and international relations. Simply put, the proposed replacement of the IRS and the reliance on significantly increased tariffs lacks credibility and is a recipe for economic disaster.