CNN reported that the president said at a cabinet meeting: "The debt is left by the previous administration. Now, tariff revenue is very high, which can not only pay off the debt but also give money to everyone... in the future, income tax may not even be needed."
The practical feasibility of this statement is questionable.
Tariffs are constrained by international economic and trade agreements, and their revenue is unstable, making it difficult to support long-term finances.
Implementing debt repayment, giving money, and reducing taxes simultaneously requires sustained huge surpluses, and short-term high tariff revenues may be difficult to maintain.
Tariffs are essentially consumption taxes, placing a higher proportion of the burden on low-income groups, and replacing income tax could exacerbate the regressivity of the tax system.
The purpose of this statement is to boost public morale in the short term, using the promises of "giving money" and "tax cuts" to gain support.
It highlights its own governance achievements by contrasting with the previous administration.
It is also aimed at creating momentum for tax reform (such as reducing direct taxes and increasing indirect taxes).
Original article: toutiao.com/article/1850433856831500/
Statement: This article represents the views of the author alone.