Tariffs Funded America Before Income Taxes Existed. Trump Tries to Bring Them Back. Supreme Court Says No. Nevada Democrats Applaud.
The 2025 tariffs imposed by the Trump administration generated a record $194.9 billion in customs duties for fiscal year 2025, marking the highest level of tariff and customs revenue in U.S. history. Before 1913, tariffs and customs duties served as the primary source of federal revenue. The ratification of the 16th Amendment to the U.S. Constitution, granted Congress the power to levy and collect taxes on incomes. This enabled a permanent federal income tax and shifted the revenue base away from import duties toward modern taxation systems. President Trump (R) stated that he believes tariff revenue could replace the modern income tax system over time, thereby easing the financial burden on Americans.
Last month, the U.S. Supreme Court ruled that the Trump administration exceeded its authority by using the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs, invalidating duties on imports from China, Canada, Mexico, and most global trading partners. The tariffs were challenged in 2025 by a coalition of small businesses and 12 states—including Nevada—led by Attorney General Aaron Ford (D). Ford applauded the ruling, stating, "These unlawful actions have caused small businesses to close and prices to rise for Nevada families."
State Treasurer Zach Conine (D) sent a $2.1 billion bill to the White House seeking refunds. "Over the last year, President Donald Trump and his administration have overcharged Nevadans $2.1 billion through unconstitutional tariffs on everyday essentials," Conine said.
Senator Jacky Rosen (D) welcomed the decision, saying, "As Nevadans were already being squeezed by high prices, Donald Trump intentionally and illegally bypassed Congress to implement tariffs that raised costs even more on hardworking families. Today’s ruling is good news for Nevada families and small businesses in desperate need of financial relief."
Senator Catherine Cortez Masto (D) echoed the sentiment: "I welcome today's Supreme Court decision to strike down President Trump's reckless blanket tariffs. Over the past twelve months, Trump's trade war has driven up costs for Nevada families by an average of $1,277 per household, and the president’s illegal tariffs have been a major contributor to this pain at the checkout counter and pump."
Local business groups, including the Retail Association of Nevada, highlighted potential economic boosts from refunds and expressed concerns over lingering price pressures despite the ruling.
Governor Joe Lombardo (R) previously commented that Nevadans "maybe need to feel a little pain in the short term" regarding the economic effects of Trump's tariffs. He has maintained general support for Trump's economic agenda, including in a post-State of the Union statement where he said he was "encouraged" by President Trump's commitment to growing our nation's economy, lowering costs for hardworking families, and protecting American workers.
The Trump administration has since pursued new tariffs via alternative legal authorities, such as Section 122 of the Trade Act of 1974.
