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Trump’s Proposal: Could Tariffs Replace Federal Income Tax?

During his 2024 presidential campaign, Donald Trump suggested the idea of eliminating the federal income tax in the United States. He envisions funding left behind by income taxes to be replaced with revenue generated from tariffs.

While dropping federal income taxes could provide several advantages for Americans, it is uncertain if the revenue from tariffs can support such a significant overhaul of the tax system.

Possible Financial Impacts on Paychecks

If Trump’s proposal were implemented, one immediate effect would be an increase in paychecks for many. GOBankingRates has analyzed potential outcomes related to this situation, focusing on the paychecks of both the upper-middle class and the median income for various states.

State-by-State Income Impact

Alabama

• Median income: $55,135
• Average bi-weekly paycheck with federal income tax: $1,681
• Bi-weekly paycheck without federal income tax: $2,022

Alaska

• Median income: $79,409
• Average bi-weekly paycheck with federal income tax: $2,462
• Bi-weekly paycheck without federal income tax: $3,054

Arizona

• Median income: $68,330
• Average bi-weekly paycheck with federal income tax: $2,111
• Bi-weekly paycheck without federal income tax: $2,576

Arkansas

• Median income: $52,242
• Average bi-weekly paycheck with federal income tax: $1,611
• Bi-weekly paycheck without federal income tax: $1,930

California

• Median income: $85,630
• Average bi-weekly paycheck with federal income tax: $2,472
• Bi-weekly paycheck without federal income tax: $3,135

Colorado

• Median income: $82,195
• Average bi-weekly paycheck with federal income tax: $2,424
• Bi-weekly paycheck without federal income tax: $3,048

Connecticut

• Median income: $83,342
• Average bi-weekly paycheck with federal income tax: $2,454
• Bi-weekly paycheck without federal income tax: $3,091

Delaware

• Median income: $73,648
• Average bi-weekly paycheck with federal income tax: $2,167
• Bi-weekly paycheck without federal income tax: $2,693

Florida

• Median income: $63,743
• Average bi-weekly paycheck with federal income tax: $2,039
• Bi-weekly paycheck without federal income tax: $2,452

“`# Income Trends Across States: A Snapshot of Median Earnings

## Georgia

• Median income: $66,368
• Average bi-weekly paycheck with federal income tax: $1,995
• Bi-weekly paycheck without federal income tax: $2,438

## Hawaii

• Median income: $87,392
• Average bi-weekly paycheck with federal income tax: $2,437
• Bi-weekly paycheck without federal income tax: $3,120

## Idaho

• Median income: $66,343
• Average bi-weekly paycheck with federal income tax: $2,003
• Bi-weekly paycheck without federal income tax: $2,446

## Illinois

• Median income: $72,624
• Average bi-weekly paycheck with federal income tax: $2,141
• Bi-weekly paycheck without federal income tax: $2,655

## Indiana

• Median income: $62,267
• Average bi-weekly paycheck with federal income tax: $1,926
• Bi-weekly paycheck without federal income tax: $2,322

## Iowa

• Median income: $65,019
• Average bi-weekly paycheck with federal income tax: $1,942
• Bi-weekly paycheck without federal income tax: $2,370

## Kansas

• Median income: $64,568
• Average bi-weekly paycheck with federal income tax: $1,945
• Bi-weekly paycheck without federal income tax: $2,367

## Kentucky

• Median income: $55,481
• Average bi-weekly paycheck with federal income tax: $1,710
• Bi-weekly paycheck without federal income tax: $2,053

## Louisiana

• Median income: $53,353
• Average bi-weekly paycheck with federal income tax: $1,660
• Bi-weekly paycheck without federal income tax: $1,987

## Maine

• Median income: $63,798
• Average bi-weekly paycheck with federal income tax: $1,922
• Bi-weekly paycheck without federal income tax: $2,336

## Maryland

• Median income: Data not provided

Average Income and Paychecks Across States: A Comparison

The financial landscape varies significantly across the United States, as reflected in the median incomes and average bi-weekly paychecks. Below is a detailed overview of several states, highlighting their respective financial statistics.

Massachusetts

• Median income: $90,080
• Average bi-weekly paycheck with federal income tax: $2,373
• Bi-weekly paycheck without federal income tax: $3,291

Michigan

• Median income: $63,243
• Average bi-weekly paycheck with federal income tax: $1,922
• Bi-weekly paycheck without federal income tax: $2,329

Minnesota

• Median income: $77,827
• Average bi-weekly paycheck with federal income tax: $2,272
• Bi-weekly paycheck without federal income tax: $2,846

Mississippi

• Median income: $48,813
• Average bi-weekly paycheck with federal income tax: $1,519
• Bi-weekly paycheck without federal income tax: $1,811

Missouri

• Median income: $61,262
• Average bi-weekly paycheck with federal income tax: $1,890
• Bi-weekly paycheck without federal income tax: $2,277

Montana

• Median income: $62,152
• Average bi-weekly paycheck with federal income tax: $1,897
• Bi-weekly paycheck without federal income tax: $2,292

Nebraska

• Median income: $66,653
• Average bi-weekly paycheck with federal income tax: $2,011
• Bi-weekly paycheck without federal income tax: $2,457

Nevada

• Median income: $67,165
• Average bi-weekly paycheck with federal income tax: $2,131
• Bi-weekly paycheck without federal income tax: $2,583

New Hampshire

• Median income: $85,002
• Average bi-weekly paycheck with federal income tax: $2,614
• Bi-weekly paycheck without federal income tax: $3,269

New Jersey

• Median income: $89,822
• Average bi-weekly paycheck with federal income tax: $2,400
• Bi-weekly paycheck without federal income tax: $3,316

New Mexico

• Median income: $55,222
• Average bi-weekly paycheck with federal income tax: $1,717
• Bi-weekly paycheck without federal income tax: $2,058

These numbers provide a snapshot of the financial situation across various states, showing how income levels and taxation impact take-home pay. Understanding these figures can aid in better financial planning and decision-making.

State-by-State Breakdown of Median Incomes and Paychecks

New York

• Median income: $75,180
• Average bi-weekly paycheck with federal income tax: $2,212
• Bi-weekly paycheck without federal income tax: $2,756

North Carolina

• Median income: $62,136
• Average bi-weekly paycheck with federal income tax: $1,910
• Bi-weekly paycheck without federal income tax: $2,304

North Dakota

• Median income: $67,510
• Average bi-weekly paycheck with federal income tax: $2,134
• Bi-weekly paycheck without federal income tax: $2,590

Ohio

• Median income: $61,937
• Average bi-weekly paycheck with federal income tax: $1,952
• Bi-weekly paycheck without federal income tax: $2,344

Oklahoma

• Median income: $56,536
• Average bi-weekly paycheck with federal income tax: $1,739
• Bi-weekly paycheck without federal income tax: $2,090

Oregon

• Median income: $71,489
• Average bi-weekly paycheck with federal income tax: $2,028
• Bi-weekly paycheck without federal income tax: $2,530

Pennsylvania

• Median income: $67,627
• Average bi-weekly paycheck with federal income tax: $2,064
• Bi-weekly paycheck without federal income tax: $2,521

Rhode Island

• Median income: $76,775
• Average bi-weekly paycheck with federal income tax: $2,296
• Bi-weekly paycheck without federal income tax: $2,857

South Carolina

• Median income: $59,393
• Average bi-weekly paycheck with federal income tax: $1,828
• Bi-weekly paycheck without federal income tax: $2,201

South Dakota

• Median income: $64,374
• Average bi-weekly paycheck with federal income tax: $2,056
• Bi-weekly paycheck without federal income tax: $2,476

Tennessee

• Median income: $59,641
• Average bi-weekly paycheck with federal income tax: $1,919
• Bi-weekly paycheck without federal income tax: $2,294

Trending: Key Economic Factors to Monitor as Policies Evolve

State-by-State Breakdown of Median Income and Paychecks

Texas

• Median income: $67,815
• Average bi-weekly paycheck with federal income tax: $2,149
• Bi-weekly paycheck without federal income tax: $2,608

Utah

• Median income: $81,555
• Average bi-weekly paycheck with federal income tax: $2,376
• Bi-weekly paycheck without federal income tax: $2,992

Vermont

• Median income: $69,354
• Average bi-weekly paycheck with federal income tax: $2,089
• Bi-weekly paycheck without federal income tax: $2,566

Virginia

• Median income: $80,865
• Average bi-weekly paycheck with federal income tax: $2,351
• Bi-weekly paycheck without federal income tax: $2,959

Washington

• Median income: $84,401
• Average bi-weekly paycheck with federal income tax: $2,598
• Bi-weekly paycheck without federal income tax: $3,246

West Virginia

• Median income: $51,481
• Average bi-weekly paycheck with federal income tax: $1,599
• Bi-weekly paycheck without federal income tax: $1,912

Wisconsin

• Median income: $67,262
• Average bi-weekly paycheck with federal income tax: $2,039
• Bi-weekly paycheck without federal income tax: $2,492

Wyoming

• Median income: $66,502
• Average bi-weekly paycheck with federal income tax: $2,113
• Bi-weekly paycheck without federal income tax: $2,558

Methodology: This analysis utilized the 2023 American Community Survey data to determine median incomes in each state. An in-house calculator estimated tax burdens for a single taxpayer, factoring in standard deductions as per 2024 tax brackets. The findings detail total annual income taxes, bi-weekly paycheck amounts, and the impacts of federal income tax removals. All data is current as of April 15, 2025.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.