Over the weekend, President Trump praised his own tariff taxes by floating the idea of giving most American adults a $2,000 “dividend” payment out of revenue generated from them. These rebate checks would go to everyone except for “high income people” according to the president.
“People that are against Tariffs are FOOLS!” the president posted on his social media platform Truth Social on Sunday. “A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.”
The president did not share any other details about how this plan would actually work. However, in a separate post made earlier this morning, he specified that the payments would go to low income and middle income Americans. Anything left over would be used to “SUBSTANTIALLY PAY DOWN NATIONAL DEBT.”
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It’s a bold proclamation from the current president with a few problems.
It’s not a new idea
(Image credit: Andrew Redington/Getty Images)
This isn’t the first time President Trump has thrown out the idea of tariff-based rebate checks. In July, the president said he was considering rebate checks, according to CBS News.
“We’re thinking about a little rebate. But the big thing we want to do is pay down debt. But we’re thinking about a rebate,” Trump told reporters.
The current suggestions come as his tariff policy is currently in front of the U.S. Supreme Court. The controversial tariff policy could be struck down by the Supreme Court which sharply rebuked the taxes during oral arguments last week. The court appears skeptical over the President’s use of the 1977 International Emergency Economic Powers Act to institute these wide-ranging import taxes.
How would the rebate work?
(Image credit: ungvar/Shutterstock)
During the first two years of the COVID pandemic, three stimulus checks were authorized by Congress, with the payments signed into law by Presidents Trump and then President Biden. Rebates and stimulus payments are generally issued via the tax code and require Congress to pass legislation authorizing the Treasury Department to issue checks.
That’s how it would normally work. The U.S. Secretary of Treasury Scott Bessent told Fox News on Sunday that the dividend “could come in lots of forms, in lots of ways.”
“You know, it could be just the tax decreases that we are seeing on the president’s agenda — you know, no tax on tips, no tax on overtime, no tax on Social Security, deductibility of auto loans,” he added.
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That possibly refers to the “big, beautiful” tax bill that Congress passed earlier this year which eliminated taxes on some tipped income and overtime pay. However, that tax code overhaul did not include rebates or dividends for taxpayers.
Unlikely to happen
Here’s the problem with Trump’s proposal; there may not be enough tariff revenue to actually make these payments.
Erica York, the vice president of federal tax policy at the Tax Foundation, provided an example of why on X. If you cap payments to only adults making $100,000 or less annually, that would cover about 150 million adults.
It would take $300 billion in revenue to make that $2,000 payment. “Only problem, new tariffs have raised $120 billion so far,” she said. 163 million Americans filed tax returns in 2024, according to the IRS. If we took that number, the needed revenue bumps up to $326 billion.
“Only problem, new tariffs have raised $120 billion so far,”
Erica York, the vice president of federal tax policy at the Tax Foundation
According to the U.S. Department of the Treasury, the federal government raised $195 billion custom duties as of September 30, when the fiscal year ended. U.S. importers have reportedly paid $89 billion in tariffs.
If the Supreme Court strikes down President Trump’s tariffs, it’s likely that businesses which paid them could be in line for refunds, further curtailing any revenue for rebate checks.
“The math gets worse accounting for the full budgetary impact of tariffs: a dollar of tariff revenue offsets about 24 cents of income and payroll tax revenue,” York continued in her analysis. She added that 2026 won’t hit that $300 billion number either, with projections suggesting that the US will make $216 billion next year.
With the rebate needing congressional approval, it’s not clear if Trump’s proposal would even get passed, and he likely doesn’t have the power to do so unilaterally, though that hasn’t stopped this administration from taking actions like instituting global tariffs which are supposed to be under the purview of Congress. We’ll just have to wait and see but I wouldn’t bank on Trump’s tariff checks arriving in the mail anytime soon.
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