Trump’s Proposal for an External Revenue Service: Transforming U.S. Fiscal Policy through International Tax Enforcement

Man clapping in front of American flag background

President-elect Donald Trump unveils plans for an External Revenue Service, aiming to revolutionize U.S. fiscal policy through international tax enforcement.

At a Glance

  • Trump proposes creating an External Revenue Service to collect tariffs and duties from foreign sources
  • The new agency would be a counterpart to the Internal Revenue Service, focusing on international trade revenue
  • Proposed tariffs include 25% on imports from Canada and Mexico, 10% on global imports, and 60% on Chinese goods
  • Creation of federal agencies requires Congressional approval, complicating Trump’s plan

Trump’s Vision for a New Revenue Agency

President-elect Donald Trump has announced plans to establish a new federal entity called the “External Revenue Service” (ERS). This agency would focus on collecting revenue from proposed import taxes, tariffs, and duties from international sources. The ERS is designed to be a counterpart to the Internal Revenue Service, shifting some fiscal reliance from domestic taxpayers to international trading partners.

Trump’s proposal aligns with his commitment to prioritize American economic interests and recalibrate trade agreements in favor of U.S. prosperity. The plan aims to address trade imbalances by imposing significant tariffs on major trading partners and global imports.

Proposed Tariff Structure

The proposed tariff structure is ambitious and far-reaching. It includes a 25% tariff on imports from Canada and Mexico, contingent on their actions regarding drugs and migrants. Additionally, Trump plans to implement a 10% tariff on global imports and a substantial 60% tariff on Chinese goods.

“Through soft and pathetically weak Trade agreements, the American Economy has delivered growth and prosperity to the World, while taxing ourselves. It is time for that to change” – Donald Trump

Trump’s rationale for these tariffs is to boost domestic manufacturing and use them as a foreign policy tool. However, trade experts warn that such measures could disrupt trade flows, increase costs, and potentially provoke retaliatory measures against U.S. exports.

Challenges and Criticisms

The creation of federal agencies is a power held by Congress, not the President, which complicates Trump’s plan. While Republicans currently hold a majority in both the House and Senate, the proposal still faces potential hurdles. Currently, Customs and Border Protection, part of the Department of Homeland Security, handles tariff collection.

“No amount of silly rebranding will hide the fact that Trump is planning a multi-trillion-dollar tax hike on American families and small businesses to pay for another round of tax handouts to the rich” – Oregon Sen. Ron Wyden

Economists are skeptical of the proposed tariffs, suggesting they are inefficient and that costs will likely be passed on to consumers. Democratic lawmakers have criticized the plan, with some calling it a tax hike on American families and small businesses.

Additional Initiatives

In a related move, Trump has appointed Elon Musk and Vivek Ramaswamy to lead the Department of Government Efficiency (DOGE), a task force aimed at reducing federal government size and regulations. This appointment aligns with Trump’s broader vision of streamlining government operations and focusing on economic growth through unconventional means.

“We will begin charging those that make money off of us with Trade, and they will start paying, FINALLY, their fair share.” – Donald Trump

As the plan unfolds, it is poised to transform how international commerce impacts the American revenue system. The success of this ambitious proposal will depend on Congressional support, economic feasibility, and the reaction of international trading partners.

Sources:

  1. Trump Says He Wants To Establish ‘External Revenue Service’ To Collect Tariff Money
  2. Donald Trump says will create ‘External Revenue Service’ to collect revenue from foreign sources
  3. World News | Will Create ‘External Revenue Service’ Agency to Collect Tariff Income: Trump
  4. Trump says he will create an ‘External Revenue Service’ agency to collect tariff income
  5. Trump says he will create an ‘External Revenue Service’ agency to collect tariff income
  6. Trump Announces ‘External Revenue Service’ | Newsmax.com