Here’s a letter to Fox Business.
Editor:
President Trump today promised to use tariff revenues to ensure that “at least $2000 a person (not including high-income people!) will be paid to everyone” (“Trump calls tariff opponents ‘fools,’ promises $2K dividend payments for Americans,” Nov. 9).
Let’s do the math (as we ignore the fact that the administration only days ago told the Supreme Court that the revenues raised by these tariffs are “incidental”).
In the second half of fiscal 2025, April through September, Trump’s tariffs brought in roughly $150 billion (or, annualized, $300 billion).
The U.S. population today is 348,000,000. Subtracting the approximately 14 million ‘illegal’ immigrants, that leaves 334 million people in the U.S. Let’s now lop off the richest ten percent. That leaves 300,600,000 Americans to get “at least $2000.” To fully fund payment of these so-called ‘dividends,’ the tariffs would thus have to bring in just over $600 billion – a sum that won’t be available to cover these “dividend” payments until the second quarter of 2027 at the earliest.
I say “at the earliest” for two reasons. First, Treasury secretary Scott Bessent insists that the tariff revenues will be used to reduce U.S. government debt – an insistence that Mr. Trump today also seems to endorse. Dollars used to pay down the debt are dollars that are unavailable to pay as rebates to us Americans of the extra taxes we paid in the form of tariffs. Second, as the tariffs achieve the president’s goal of reducing Americans’ purchases of imports – an outcome that takes time – the amount of revenue brought in by the tariffs will decline.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
