Name: It’s much WORSE than you think - It will wipe out America
Uploaded: 2025-08-21T17:55:18.000Z
Duration: 23 min 46 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Gerund

If you're a business owner, you probably hate paying taxes.

Past simple

And that's why Trump proposed to eliminate the income tax entirely.

To-infinitive

So here in this video, I wanna try to answer the question, is it possible for the United States to completely eliminate income tax?

Finally, the government is going to do something in order to help the average Joe, the average American.

Because usually when you take a look at the taxes, you kind of realize that most of the taxes are being paid by the average doctor, lawyer, engineer, and the top 1% doesn't really pays much of taxes.

So here in this video, we're gonna figure out if tariffs can actually replace the entire income tax.

Now, in order to do that, we have to take a look at how the US government actually earns its money and then spends its money.

So this is the government revenue of the United States.

And you can clearly see that half of the revenue comes from the income tax, which is around $2.2 trillion or 49%.

So when we are talking about getting rid of the income tax, we're not talking about something small, a tiny tax or a tiny source of revenue for the government.

We are talking about 50% of the government's budget.

Now, if we wanna get a deep deeper into that, we kind of realize that the payroll tax is the second largest source of revenue for the government at around 37% or $1.6 trillion.

And if you're gonna be honest with each other, payroll tax is also income tax.

Yes, it's not called income tax, but it's actually being proposed in order to tax you.

And when your employer proposes or creates or gives that job to you, guess what?

They will factor in the payroll tax within your income.

So if we did not have the payroll tax, your income would be much higher than it's today.

So if we eliminate the income tax and the payroll tax, then we eliminate around 80 to 90% of all the government's revenue.

And it's very clear because all the taxes that are being paid by the corporations represent around 90% of the government's budget or less than half a trillion dollars.

And everything else is around $230 billion, which is less than 5%.

So how is it possible that there was a time in the US history that everything was covered by tariffs?

And when Trump said it, it was not a joke.

It actually was a period in the history of the United States where the government was making so much money from tariffs that it covered everything and there was no income tax in the United States.

So is it possible to go back to that golden age?

So the US government spends around $6.2 trillion and it earns around $4.5 trillion.

And if you're wondering how on earth is the US government spending more than it earns, it's very simple.

We are running a huge deficit and we are taking a debt.

So the government borrows trillions of dollars every single year in order to make sure that it can meet its obligations.

And that's why the US national debt is so huge.

And most of those spending goes into social security, national defense, Medicare, and the payroll tax or the payroll income and the income tax together represent around $3.8 trillion.

So if we get rid of this, the government will have around $500 to $600 billion.

So imagine for a moment that it's the average person who's funding the government.

These are not the billionaires or the trillionaires.

I mean, we don't have trillionaires, I mean, at least for now, but anyhow, you're the one who's paying most of those taxes because rich people pay capital gain tax.

And a capital gain tax is represented in this chart.

It's part of the other sources of income for the government.

And that's because capital gain tax is paid by the rich and it's usually not paid at all.

And it basically means that rich people usually make their money from investments.

And you actually pay money or the taxes on your investments only when you sell your investments.

So when you watch the news and you see that Elon Musk has made $100 billion, guess what?

Because in order for Elon Musk to pay taxes on his $100 billion, he need to sell, he must sell his investments, realize his gains, have that cash in the pocket, then only he's going to pay taxes.

So unless he does that, he's not paying taxes.

My Nvidia stocks has grown by 150%, for example, over the last 12 months.

Because I'm not selling my investments unless I sell my investments.

So if I invested, for example, a million dollars into Nvidia, and now they're worth $2.5 million, I'm not paying any taxes unless I'm selling that.

And that's why billionaires get so insanely rich while they don't pay any taxes at all.

And even if they pay taxes, guess what's their tax rate?

It is anything between zero to 15% at the best case scenario.

And that's why even if they pay taxes, they will pay much smaller than that.

And that's why if you take a look at this number, you see that it's a tiny percentage of the government's revenue.

They're not dumb, and that's why they're so insanely rich.

When they realize that capital gain tax rate is so high, they will not be selling their investments.

So there will be a president who will lower down taxes, and then only they are going to sell their investments, and they will pay a much lower percentage than everybody else.

So if we actually get rid of the income tax and the payroll tax, the government will actually go bankrupt.

And that's an important thing to keep in mind.

So how did the United States survive so many years without paying any taxes, without having an income tax or payroll tax?

This is how the government used to collect income and taxes historically.

And if you see at the yellow chart or the yellow color, this is tariffs.

So for a long time, the United States used to cover all of its expenses from tariffs.

And something fundamentally changed over this period when the sources of revenue for the government has changed.

And now tariffs represent a tiny percentage as you can see it right now.

So what exactly happened back in 1912 and 1914 when income tax was introduced and it started playing a fundamentally huge role in the government?

How did the people woke up one day and they saw that now they have to pay a 20, 30% income tax and nobody cared about that?

Because the United States got its independence and fought for its independence in the first place because one of the reasons was that they did not want to keep paying taxes to the Britain.

So how did the US people actually accepted that?

And to answer that question, we have to take a look at the history.

So if you just go back, for example, to 1914, World War I happened.

And World War I was probably the main reason why income tax actually started playing such an important role in the US government.

So before World War I, United States had around 200,000 people in its military and it's had a small outdated Navy.

Remember, the United States is covered or, I mean, from one side it has an ocean and from the other side it has an ocean.

So to protect itself, it needs a huge Navy.

But back in those days, it did not have a Navy.

So to sustain such a small military, it's very easy.

But when World War I happened and the United States was dragged into that war, United States had to maximize its spending on its military.

So suddenly it went to around 4.8 million active personnel.

The United States increased its number of ships to around 774 ships and became the second largest Navy in the world, just behind Great Britain.

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It’s much WORSE than you think - It will wipe out America

depression

eliminate

realize

average