In the early 20th century, before America introduced an income tax, tariffs paid many of the government’s bills. President Donald Trump wants to revive that approach. He has repeatedly floated the idea of an “External Revenue Service”, under which Uncle Sam would scrap income taxes and instead rely on levies at the border, with foreigners, at least in theory, funding the American government. “It will be a BONANZA,” Mr Trump posted recently on his social-media site, claiming that tariffs could all but eliminate income taxes for people earning less than $200,000 a year.
