President-elect Donald Trump revealed plans on Tuesday to establish a new agency that would manage revenue derived from foreign sources, such as tariffs. This agency, named the External Revenue Service (ERS), will function alongside his broader economic strategy.

“For far too long, we have relied on taxing our Great People using the Internal Revenue Service (IRS). Through soft and pathetically weak Trade agreements, the American Economy has delivered growth and prosperity to the World, while taxing ourselves,” Trump announced on Truth Social.

He further stated, “I am today announcing that I will create the EXTERNAL REVENUE SERVICE [ERS] to collect our Tariffs, Duties, and all Revenue that come from Foreign sources.”

The president-elect explained that the ERS is slated for launch on Jan. 20 and will be tasked with holding foreign entities accountable for benefiting from U.S. trade while avoiding fair contributions. “They will start paying, FINALLY, their fair share,” Trump declared.

Trump, now 78, has consistently emphasized his intent to implement tough trade policies. Among his proposals are plans to impose a 25% tariff on Mexico and Canada should they fail to meet his stringent immigration policy demands. Additionally, he has warned of halting business dealings with nations that refuse to accept deported illegal immigrants.

Further, Trump has proposed tariffs ranging from 10% to 20% on all foreign products, with duties on Chinese imports reaching as high as 60%. He has also hinted at major tax reforms, including the elimination of taxes on tips, overtime earnings, and Social Security benefits. He has even entertained the idea of abolishing federal income taxes altogether, arguing that his tariff plans could generate sufficient revenue to replace them.

Currently, U.S. Customs and Border Protection (CBP), an agency under the Department of Homeland Security, oversees tariff collection. The establishment of a separate ERS would likely require congressional approval, though Trump may attempt to house it within an existing governmental structure.

Steve Bannon, a close ally of Trump, expressed his support for the initiative earlier in the day, suggesting to Politico that the ERS should operate under the Treasury Department. He argued that this would relieve the IRS of additional responsibilities.

However, not everyone is convinced of the proposal’s feasibility. Bryan Riley from the National Taxpayers Union highlighted a significant logistical challenge: “The federal government collects duties from US importers,” Riley told The Post. “It does not collect duty revenue from foreign sources, so it is not clear what the point of a new External Revenue Service would be.” Riley suggested that a more practical approach would be to improve the existing IRS infrastructure to better serve American taxpayers.

Conversely, economist EJ Antoni from the Heritage Foundation expressed enthusiasm for the concept. “I really, really love this idea,” Antoni said in an interview with The Post. He praised the shift from income taxes to tariffs, describing it as a positive development. Antoni speculated that the ERS could emerge by transforming an existing agency into one better equipped to meet the needs of the American populace.

{Matzav.com}