A new study by accounting automation firm Dancing Numbers reveals that former US President Donald Trump's plan to replace the federal income tax with a tax could save the average American at least $134,809 over their lifetime.
The report also found that the savings could reach $325,561 per person if states also abolished their payroll-based income taxes. Residents of high-tax states like New Jersey, New York, Connecticut, Illinois and Massachusetts would benefit the most from the proposal.
20% Tax Rebate Before Eliminating the Income Tax
Dancing Numbers founder Punit Jindal has suggested that the plan could be preceded by a 20% tax rebate – dubbed the “DOGE Dividend” – to help people save immediately before the federal income tax is eliminated entirely.
Trump first floated the idea in October 2024, proposing to fund the government through tariffs on imported goods. He compared the plan to the 19th-century U.S. economy, when tariffs were a major source of revenue before a flat income tax was introduced.
In a recent appearance on the *Joe Rogan Experience* podcast, Trump emphasized that tariffs have contributed to America’s economic prosperity and independence. Proponents argue that the plan would stimulate the market, giving individuals more investment opportunities, thereby promoting wealth growth.
However, critics warn that relying on tariffs could raise the price of imported goods, hurting consumer spending.
Commerce Department Support
US Commerce Secretary Howard Lutnick, appointed in February 2025, has expressed support for Trump's proposal. He has even proposed replacing the Internal Revenue Service (IRS) with an "outside tax agency" focused solely on collecting tariffs.
Lutnick noted that in the early 20th century, the US was the richest country in the world thanks to fair trade policies. He also criticized current politicians for spending too much and asking citizens to pay more taxes each year.
Impact on Cryptocurrency
Trump's cryptocurrency agenda is also gaining traction. Coinbase CEO Brian Armstrong said Trump's plan has become a major topic of discussion in the finance and technology industries.
At the World Economic Forum (WEF) in Davos, Armstrong revealed that most of his conversations with major market leaders revolved around Trump’s vision for digital assets.
During the WEF, Trump pledged to make the United States “the world’s capital of artificial intelligence and cryptocurrencies.” This pledge has been a major turning point for the cryptocurrency industry. Armstrong praised Trump’s approach, along with the pro-free-market policies of Argentine President Javier Milei and El Salvador President Nayib Bukele.
Among Trump’s plans is the rumored creation of a Strategic Bitcoin Reserve. However, his latest executive order suggests that his vision for the fintech industry may be even broader.
