Commerce Secretary Howard Lutnick Unveils Plan to Slash Taxes, Offset by Tariffs

March 13, 2025 - Washington, D.C., USA - In a striking announcement that could reshape the U.S. economic landscape, Commerce Secretary Howard Lutnick revealed on March 13, 2025, that President Donald Trump is pushing to eliminate income taxes for Americans earning less than $150,000 per year. The ambitious policy, described as a cornerstone of Trump’s economic agenda, aims to put more money back into the pockets of millions of working-class families while fundamentally altering how the federal government generates revenue.

Speaking in an interview with CBS News in Washington, D.C., Lutnick outlined the president’s vision with characteristic fervor. “I know what his goal is—no tax for anybody who makes less than $150,000 a year. That’s his goal. That’s what I’m working for,” he declared. The proposal, if enacted, would exempt roughly 80% of U.S. households from federal income tax, marking one of the most significant tax reforms in modern American history.

The plan comes as part of Trump’s broader economic strategy, which includes eliminating taxes on tips, overtime pay, and Social Security contributions—moves Lutnick described as “transformative ideas that will change America.” To offset the massive loss in tax revenue, Lutnick emphasized that the administration intends to lean heavily on tariffs imposed on foreign imports and crackdowns on overseas tax evasion. “We’re going to make the outsiders pay,” he said, echoing Trump’s long-standing pledge to shift the fiscal burden away from American citizens and onto international entities.

Lutnick’s remarks have sparked immediate reactions across the political and economic spectrum. Supporters, particularly among Trump’s base, hailed the proposal as a game-changer for middle- and lower-income families. Social media platforms buzzed with praise, with some calling it “one of the most popular pieces of legislation to ever pass in American history” if it comes to fruition. However, critics raised alarms about the feasibility of the plan, warning that slashing federal revenue without a clear replacement could balloon the national debt or trigger economic instability.

To address such concerns, Lutnick pointed to Trump’s tariff strategy, which he claims could generate hundreds of billions annually. He cited examples like foreign cruise ships and supertankers that currently evade U.S. taxes, arguing that closing these loopholes would fund the tax cuts. Additionally, he floated the idea of a $5 million “Gold Card” visa program to raise further revenue, a concept Trump has previously endorsed.

The announcement builds on Trump’s earlier promises to overhaul the tax system, a theme that resonated during his campaign and has gained momentum since his return to the White House. In January, at the 2025 Republican Issues Conference in Miami, Trump advocated for replacing income taxes with tariffs, stating, “Instead of taxing our citizens to enrich foreign nations, we should be tariffing and taxing foreign nations to enrich our citizens.” Lutnick’s revelation now provides a concrete threshold—$150,000—that brings the policy into sharper focus.

Economists remain divided on the implications. Proponents argue that relieving tax burdens on lower earners could boost consumer spending and stimulate growth, particularly in an economy still navigating post-pandemic recovery. Skeptics, however, caution that higher tariffs could increase the cost of imported goods, potentially offsetting any financial gains for consumers and risking trade wars with key partners like Canada and Mexico.

As the policy takes shape, Lutnick’s role as Commerce Secretary positions him as a key architect of Trump’s trade and economic agenda. Confirmed by the Senate in February, the billionaire financier has vowed to sell off his business interests to focus on implementing the president’s plans, including overseeing the Office of the United States Trade Representative. His confirmation hearing highlighted his staunch support for tariffs as a tool to “protect the American worker,” a stance that aligns closely with Trump’s vision.

With the House of Representatives having approved a Republican budget resolution in February that included $4.5 trillion in tax cuts, the no-tax policy for those under $150,000 now faces its next test in the Senate. If successful, it could redefine the federal government’s fiscal framework, though questions linger about its long-term sustainability. For now, Lutnick remains unwavering, dismissing recession fears and framing the policy as a patriotic push to “unleash America out to the world.” Whether it delivers on that promise—or falters under economic pressures—remains a story to watch in the months ahead.