The IRS Isn’t Going Away, and This Is How We Know
As the 2024 campaign neared its send, candidate Donald Trump began promising that, if elected, he would support the elimination of income taxes. Shortly after he was sworn in, Trump then began saying he planned to abolish the Internal Revenue Service. The Trump team claimed in each case that it could raise enough tax revenue from tariffs to replace tax revenue from income taxes.
By March, however, Trump began backtracking, and his administration announced that the new goal was to eliminate income taxes for people making under $150,000 per year.
That last development on its own tells us that the IRS isn’t going away. If people making more than $150,000 are still going to pay income tax, then there will still be an IRS to which we’ll need to send tax returns to prove we’re not making more than $150,000.
But even if we ignore that problem, there are at least two other reasons why we can be sure the IRS isn’t going anywhere. The first way we know this is from the fact that the Trump administration is only talking about “abolishing” the progressive individual income tax. Administration mouthpieces have said nothing at all about getting rid of the income taxes known as “payroll taxes” that every wage earner pays.
The second way we know that the IRS isn’t going away is that taxes on imports—i.e., tariffs—simply aren’t going to bring in enough revenue to keep funding all the popular spending programs that Trump clearly has no interest in cutting.
Payroll Tax: The Income Taxes All Workers Pay
When politicians talk about “the income tax” they virtually always mean the progressive individual income tax. This tax is paid mostly by the top 50 percent of earners. The bottom fifty percent of earners pay an average income tax rate of 3.3 percent.
But there is another income tax paid by all wage earners, regardless of income level, and that is the payroll tax. There is a reason why politicians never mention this income tax: it is connected to the very popular welfare programs known as Social Security and Medicare. The Social Security tax in 2025 is 12.4 percent. The Medicare tax is an additional 2.9 percent. Half of this is paid by the employee and half is paid by the employer. Of course, the employee really pays for both halves because employers effectively reduce wages to pay the payroll tax.
The money collected from these taxes goes into the general fund, and not into any sort of “trust fund.” That means it’s simply an income tax that’s used to beef up federal revenues. It is true enough, though, that without this tax, it would be much harder for the federal government to collect enough revenue to keep Social Security and Medicare funded at its present levels. The feds need today’
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LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.
