The top Democrat on the Senate Finance Committee said Tuesday that President-elect Donald Trump's proposed creation of an "External Revenue Service" to collect tariff proceeds can't conceal his plans for a massive tax giveaway to the wealthy and large corporations.
"No amount of silly rebranding will hide the fact that Trump is planning a multitrillion-dollar tax hike on American families and small businesses to pay for another round of tax handouts to the rich," Sen. Ron Wyden (D-Ore.) said in a brief statement after Trump announced his proposal in a social media post.
The president-elect wrote that on the first day of his new term, he intends to create "the EXTERNAL REVENUE SERVICE to collect our Tariffs, Duties, and all Revenue that come from Foreign sources."
"We will begin charging those that make money off of us with Trade, and they will start paying, FINALLY, their fair share," Trump added. "January 20, 2025, will be the birth date of the External Revenue Service."
Only Congress can establish new executive branch agencies, so it's unclear how Trump's proposed External Revenue Service would be established. Currently, U.S. Customs and Border Protection collects tariff revenue.
Outside advisers to Trump anonymously toldThe Washington Post that the president-elect's plan "could involve renaming an existing office within the Treasury Department."
Trump and Republican lawmakers have pointed to tariff revenue—along with deep cuts to Medicaid, federal nutrition assistance, and other key programs—as a potential way to help offset the huge projected cost of their proposed extension of the 2017 tax cuts, parts of which are set to expire at the end of the year.
But the Institute on Taxation and Economic Policy (ITEP) noted in an analysis conducted shortly before the November election that the sweeping tariffs Trump has floated "would largely be passed onto consumers as increased prices." Those price increases "would more than offset" Trump's proposed tax cuts "for all income groups outside the richest 5%."
"If these proposals were in effect in 2026, the richest 1% would receive an average tax cut of about $36,300 and the next richest 4% would receive an average tax cut of about $7,200," ITEP found. "All other groups would see a tax increase, with the hike on the middle 20% at about $1,500 and the increase on the lowest-income 20% of Americans at about $800."
Trump's call for the creation of an "External Revenue Service" comes days after CNNreported that the president-elect is "considering declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries."
"The declaration would allow Trump to construct a new tariff program by using the International Economic Emergency Powers Act, known as 'IEEPA,' which unilaterally authorizes a president to manage imports during a national emergency," the outlet continued, citing unnamed sources. "Trump, one of the sources noted, has a fondness for the law, since it grants wide-ranging jurisdiction over how tariffs are implemented without strict requirements to prove the tariffs are needed on national security grounds."
The emergency declaration could come as soon as Inauguration Day, according toAxios.