How Much Could Trump’s Tariffs Save the Average American in Taxes?

Donald Trump has ignited debate with his proposal to replace federal income taxes with tariffs on foreign imports. Speaking to MAGA supporters, he claimed this shift would ease the tax burden on American workers.

His proposal comes amid growing frustration with the tax system. A recent AP-NORC poll found that two-thirds of Americans believe they pay more than their fair share. 

This frustration raised key questions: How much do Americans pay in taxes, and what could the potential lifetime tax relief for the average American look like in real numbers if Trump’s plan becomes a reality?

The Dancing Numbers team investigated this across all 50 states (and D.C.), and here are our findings:

Key insights from the study

• Potential Lifetime Tax Savings: If Trump’s tariffs replaced income taxes, an average American could save $134,809 in federal taxes, with potential savings reaching up to $325,561, effectively eliminating their entire income tax burden.
• Current Tax Burden: The average American pays $325,561 in income taxes over a lifetime, contributing to a total tax payment of $497,804 (26.7% of $1.87 million in lifetime earnings).
• Residents of New Jersey face the highest lifetime tax burden ($755,493), with $146,160 (19.35%) in federal income tax and $335,025 (44.30%) in total income tax. 
• Mississippi residents pay the least ($343,885), with $92,880 (27.01%) going to federal income tax. 
• Taxpayers in New Jersey will pay the most in property taxes ($367,446) over their lifetime, followed by those in New Hampshire ($256,432) and Connecticut ($255,606), making homeownership significantly more expensive.
• Taxpayers in Kansas will pay the most in car taxes over their lifetime ($8,603), followed by those in California and Illinois, each paying $8,316. These amounts include vehicle purchase and registration costs.

Taxpayers in Tennessee will pay the most on everyday expenses ($65,703), followed by those in Louisiana ($65,696), covering food, clothing, personal care, and entertainment.

Trump’s Tariff Plan (If Worked): How Much Will An Average American Save In Their Lifetime Taxes?

Trump’s tariff plan could potentially reduce lifetime tax liabilities for average Americans, particularly by eliminating federal income tax or all wage-based income taxes. To understand its impact, we analyzed income and lifetime taxes in detail.

Breakdown of Lifetime Taxes & Potential Relief Under Trump’s Tariff Plan

Currently, the average American pays $499,444 in lifetime taxes, with $134,809 going to federal income tax and $327,106 in total wage-based income tax.:

• Federal Income Tax: $134,809 (Potential Relief: $134,809 if eliminated)
• Total Income Tax (Wages): $327,106 (Potential Relief: $327,106 if all wage-based income tax is eliminated)
• Property Tax: $132,081 (No relief under Trump’s plan)
• Car Tax: $5,843 (No relief under Trump’s plan)

If Trump’s tariff-based tax system replaces only federal income tax, the average American could save $134,809 over their lifetime. If it eliminates all wage-based income taxes, the potential relief jumps to $327,106. 

However, other taxes such as property, car, and expenditure taxes would remain unchanged, meaning Americans would still continue to bear indirect taxes.

The following chart provides a detailed breakdown of lifetime tax payments and the potential savings if Trump’s plan becomes a reality.

Top 5 Most Taxed States That Will Benefit from Trump’s Tariff Plan to Replace Income Tax

If Trump’s tariff plan successfully eliminates federal and wage-based income taxes, residents of high-tax states like New Jersey, Connecticut, New York, Massachusetts, and Illinois could experience significant lifetime tax savings.

#1. New Jersey

• Federal Income Tax: $146,160 (Potential Relief: $146,160 if eliminated)
• Total Income Tax (Wages): $335,025 (Potential Relief: $335,025 if all wage-based income tax is eliminated)
• Property Tax: $367,446 (No relief under Trump’s plan)
• Vehicle Tax: $7,599 (No relief under Trump’s plan)

New Jersey residents pay the highest taxes in the U.S., with an average 38.5% lifetime tax rate, totaling $755,493—nearly double what a resident in Delaware ($395,216) pays.

Even though New Jersey ranks #22 in income taxes, #30 in sales taxes, and #12 in vehicle levies, residents still face the highest overall tax burden in the country. 

Property taxes drive much of this burden, with New Jersey ranking #1 nationwide. Homeownership in the state is the most expensive in the country, with residents paying an average of $367,446 in property taxes—3.03x the national average ($121,221).

Residents stand to gain the most if Trump’s tariff plan replaces federal and wage-based income taxes. 

Eliminating federal income tax would save New Jersey residents $146,160, while removing all wage-based income taxes could boost total savings up to $335,025 over their lifetime, cutting 19.35% and 44.35% from their total lifetime tax burden, respectively.

#2. New York

• Federal Income Tax: $136,215 (Potential Relief: $136,215 if eliminated)
• Total Income Tax (Wages): $356,130 (Potential Relief: $356,130 if all wage-based income tax is eliminated)
• Property Tax: $255,234 (No relief under Trump’s plan)
• Sales Tax: $58,711 (No relief under Trump’s plan)
• Vehicle Tax: $4,588 (No relief under Trump’s plan)

New York residents face a 35.9% lifetime tax burden, totaling $674,663, making it one of the most tax-heavy states in the country. 

Income taxes take the biggest share at $356,130, followed by $255,234 in property taxes, $58,711 in retail taxes, and $4,588 in car taxes. While the state ranks #4 in property taxes, #14 in income taxes, and #10 in sales taxes, it has a relatively lower #39 ranking in vehicle levies. 

New Yorkers could see major tax savings if Trump’s tariff plan replaces federal and wage-based income taxes. 

Eliminating federal income tax alone would save them $136,215, reducing their total lifetime tax burden by 20.19%. If all wage-based income taxes were removed, their savings could rise to $356,130, cutting 52.79% from their total lifetime taxes.

With such a high tax load, New Yorkers would see a major financial relief under Trump’s plan, allowing them to retain more of their lifetime earnings.

#3. Connecticut

• Federal Income Tax: $149,535 (Potential Relief: $149,535 if eliminated)
• Total Income Tax (Wages): $380,070 (Potential Relief: $380,070 if all wage-based income tax is eliminated)
• Property Tax: $255,606 (No relief under Trump’s plan)
• Sales Tax: $43,696 (No relief under Trump’s plan)
• Vehicle Tax: $7,283 nationwide (No relief under Trump’s plan)

Connecticut residents face a 34.5% lifetime tax burden, totaling $686,655, with income taxes making up the largest portion at $380,070. 

Property taxes account for $255,606, though they remain lower than in New Jersey. The state ranks #3 in property taxes, #5 in income taxes, #33 in sales taxes, and #14 in vehicle levies, making it one of the highest-taxed states in the country.

Connecticut residents could see significant tax relief if Trump’s tariff plan replaces federal and wage-based income taxes. 

Eliminating federal income tax would save $149,535, reducing their total lifetime tax burden by 21.78%. If all wage-based income taxes were removed, their savings would rise to $380,070, cutting 55.35% of their total lifetime taxes.

#4. Illinois

• Federal Income Tax: $139,140 (Potential Relief: $139,140 if eliminated)
• Total Income Tax (Wages): $372,780 (Potential Relief: $372,780 if all wage-based income tax is eliminated)
• Property Tax: $202,866 (No relief under Trump’s plan)
• Sales Tax: $60,817 (No relief under Trump’s plan)
• Vehicle Tax: $8,316 (No relief under Trump’s plan)

Illinois residents face a 33.9% lifetime tax burden, totaling $644,778, which is nearly one-third more than the national average of $497,804.

Income taxes make up a major share of this burden, ranking #7 in the nation. Illinois residents could see significant relief if Trump’s tariff plan replaces federal and wage-based income taxes.

 Eliminating federal income tax would save $139,140, reducing 21.58% of their total lifetime tax burden. Removing all wage-based income taxes would push savings to $372,780, cutting 57.82% of total lifetime taxes.

Property taxes add another heavy financial strain, with residents paying $202,866, while retail taxes contribute $60,817. Illinois also ranks #2 in estimated lifetime car tax payments at $8,316, further increasing the overall tax load.

The state ranks #6 in property taxes, #8 in sales taxes, and #2 in vehicle levies, making it one of the highest-taxed states in the U.S

#5. Massachusetts

Massachusetts residents face a 32.9% lifetime tax burden, totaling $679,404, making it one of the highest-taxed states in the U.S. 

Income taxes make up the largest portion of this burden at $400,590, while property taxes contribute $228,637, ranking among the highest in the country.

The state holds the #5 spot in property taxes, #2 in income taxes, #35 in sales taxes, and #15 in vehicle levies, further reinforcing its status as an expensive place for long-term financial planning.

If Trump’s tariff plan replaces federal and wage-based income taxes, Massachusetts residents could experience significant tax relief. Eliminating federal income tax would save them $158,850, cutting their total lifetime tax burden by 23.38%. Removing all wage-based income taxes would increase savings to $400,590, reducing their total lifetime taxes by 58.96%.

How Trump’s Tariffs Could Escalate Migration from High-Tax to Low-Tax States

Rising income taxes, property costs, and overall tax burdens have driven the ongoing trend of migration from high-tax to low-tax states. 

Residents in states like New York (35.9% tax burden), New Jersey (38.5%), and California (30.9%) are increasingly moving to tax-friendly states such as Florida (27.1%), Texas (26.0%), and Tennessee (21.9%), where they can keep more of their earnings.

If Trump’s proposed tariffs lead to lower federal taxes, this could further incentivize migration by making the overall tax gap between states even more pronounced. Wealthy individuals, small businesses, and millennials looking for financial relief may find relocating even more compelling, boosting no-income-tax states like Florida and Texas.

California alone lost over 87,000 workers due to high living costs and taxes—a trend that could accelerate if tariffs make lower-tax states even more attractive for long-term wealth preservation. With affordability, reduced lifetime taxes, and better job opportunities at stake, this shift is already reshaping America’s economic landscape and might become more pronounced if Trump’s tariff plans succeed.

Methodology

The analysis provides a comprehensive view of an individual’s lifetime tax burden across different states based on state and federal tax rates, property tax reports, and consumer expenditure surveys to find out how much they could save if Trump’s tariff plans work.

We used median individual earnings data for high school graduates from the American Community Survey (2023) and applied a 5% inflation adjustment for 2024. Taxes are calculated for single filers, considering state and federal income taxes, FICA payments, and SmartAsset’s tax calculator, assuming consistent tax rates over 45 working years.

Property taxes are determined using state-specific median property tax rates from Business Insider report. We assume that homeownership begins at age 38 (NAR Report) and continues until age 79.3, which is the average life expectancy (UN Population Data).

Vehicle taxes are based on the Toyota RAV4, the most sold car in the U.S., priced at $28,675. Sales tax rates for vehicles are sourced from multiple sources, including Factory Warranty List and World Population Review. We assume individuals start driving at age 20, continue until age 70, and own four cars in their lifetime (one every 12.5 years)Spending taxes are calculated using state sales tax rates from the Tax Foundation, applied to food, clothing, entertainment, and personal expenditures based on the Consumer Expenditure Survey (CEX).