Trump claims tariffs could 'completely eliminate' income taxes for Americans making under $200,000 — but is it for real? These 2 assets can help slash your tax bill no matter what he does

That’s a bold promise, especially considering that only 14.4% of U.S. households earned more than $200,000 annually in 2023, according to Census Bureau data. In other words, if Trump’s vision holds true, the vast majority of Americans would pay no income tax at all.

But don’t celebrate just yet. While Trump is optimistic, experts say the math simply doesn’t add up.

Economists Erica York and Huaqun Li of the Tax Foundation were blunt, explaining in a response on April 28 that “the individual income tax raises more than 27 times as much revenue as tariffs currently do,” and “even eliminating income taxes for a subset of taxpayers, such as those earning $200,000 or less, would require significantly higher replacement revenues than tariffs could generate.”

They estimate that the tariffs Trump has imposed and scheduled as of April 2025 would generate nearly $167 billion in new federal tax revenue in 2025 — covering less than 25% of the cost of eliminating income taxes for people earning below $200,000.

While Trump’s proposal faces serious doubts, policy changes aren’t the only route to lowering tax bills. Here are two powerful assets that everyday investors can use to their advantage.

Stocks

Scott Galloway, professor of marketing at New York University’s Stern School of Business, once said that if you’re trying to build wealth, you have “an obligation to pay as little tax as possible.”

His advice? Keep it simple: “You buy stocks, you never sell them, you borrow against them.”

Galloway broke it down with an example: “You own $100 in Amazon stock. You need money to buy something. Instead of selling the stock, and let’s say it’s gone up 50% ... You would have to realize a capital gain and pay long-term capital gains [tax] on that $50 gain. No, just borrow against it and let the stock continue to grow.”

This strategy allows investors to tap into the value of their portfolios without triggering a taxable event. Because capital gains are only taxed when realized, borrowing against appreciated assets lets investors access cash while deferring taxes.

Meanwhile, the investments themselves can continue to grow. And since the interest on the loan is often smaller than the tax bill from a sale, this approach can be a powerful tool for preserving and compounding wealth over time.

Of course, not all investors want to pick individual stocks — and you don’t have to. Warren Buffett, one of the most successful investors of our time, recommends a much simpler path: buying a cross-section of the American economy.

“In my view, for most people, the best thing to do is own the S&P 500 index,” Buffett has stated, meaning invest in an S&P 500 index fund. This straightforward approach gives investors exposure to the top American companies on the stock market, providing diversified exposure without the need for constant monitoring or active trading.

You don’t always have to put away large sums to move toward your retirement goals. Ten dollars a week could make a difference – if you’re smart about what to do with your spare change.

When you make a purchase on your credit or debit card, Acorns automatically rounds up the price to the nearest dollar and places the excess — the coins that would wind up in your pocket if you were paying cash — into a smart investment portfolio.

Let’s say you purchase a doughnut for $2.30. Before you’re done licking the sugar off your fingers, Acorns will round the amount to $3.00 and invest the 70-cent difference for you. Look at this math: $2.50 worth of daily round-ups add up to $900 per year — and that’s before your savings earn money in the market.

Plus, if you sign up now, you can get a $20 bonus investment.

Real estate

Real estate has long been a go-to asset for building wealth — and one of the reasons is the generous tax treatment it receives.

When you earn rental income from an investment property, you can claim deductions for a wide range of expenses, such as mortgage interest, property taxes, insurance and ongoing maintenance and repairs.

Real estate investors also benefit from depreciation — a tax deduction that recognizes the gradual wear and tear of a property over time.

Today, you don’t need to be a millionaire or buy property outright to benefit from real estate investing.

For example, Homeshares opens the door to the $30-plus trillion U.S. home equity market — a space that was once reserved almost exclusively for institutional investors. With a minimum investment of $25,000, accredited investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.

With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.

Another way to invest in real estate is by purchasing rental properties and becoming a landlord. But for the average American who wants to avoid the need for a hefty down payment or the burden of property management, crowdfunding platforms like Arrived make it easier to slice yourself up a piece of that pie.