Every time a big expense comes up, President Donald Trump assures Americans that all the money raised from tariffs will take care of it. The Cato Institute, a libertarian think tank, has been tracking Trump’s promises on how he would spend the revenue going back to the campaign. Added together, Trump has said the windfall from his tariffs will help cover nearly $6 trillion in costs. That’s over 22 times more than the administration’s own estimates for how much revenue his taxes on imports will generate this year.
We ran the numbers, and they just don’t pencil.
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All told, for Trump to keep his promises on what tariff revenue would be used for, he’d need them to raise almost $6 trillion this year. The U.S. imported $3.61 trillion in goods last year, so such a number isn’t even possible.
My latest column at The Dispatch examines what President Trump’s now-canceled Greenland tariff threat says about not only US trade policy but alsothe increasing use and abuse of “emergency” powers by the executive branch (and not just Trump).
Summarizing previous Cato research, I note that the 1976 Senate special committee charged with emergency powers reform was appalled that four national emergencies were in effect at that time, yet “today we live under 50 active national emergencies, several of which date back decades and all of which unlock broad executive powers—under IEEPA mainly but also several other US laws—that are typically reserved to Congress or delegated to the president in a much narrower fashion.” Here’s the full list.
California is flirting with a new and destructive tax. A proposed ballot initiative, the 2026 Billionaire Tax Act, would impose a one-time 5% levy on the net worth of California residents with more than $1 billion, calculated as of Jan. 1, 2026, with payment due in 2027 and an option to spread payments over five years at an added charge.
While the tax would be a “one-time event,” nothing would prohibit similar initiatives in the future. Supporters call it a tax on billionaires, but in practice it would be a giant, government-mandated liquidation event for people whose wealth is often tied up in illiquid business equity. It also contains a feature that should make any taxpayer uneasy: It would be retroactive to the start of 2026.
California has seen this movie before, and the voters wrote the ending in 1978 with Proposition 13, a constitutional amendment that limited property-tax increases.
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Europe’s experience should further sober California voters. Over the past few decades, most countries that experimented with broad net-wealth taxes abandoned them after discovering that they raised modest net revenue relative to their administrative burden while encouraging avoidance and relocation. Of the 12 Organization for Economic Cooperation and Development countries that had broad wealth taxes in the 1990s, only Norway, Spain and Switzerland still do. Most recently, Norway’s tighter wealth-tax regime coincided with an exodus: Nearly 500 high-net-worth individuals left the country in 2022 and 2023, illustrating how sensitive location decisions become when governments tax worldwide wealth and toughen exit rules.
California doesn’t suffer from too little taxation. Its top marginal state income-tax rate is 13.3%, the highest in the U.S. Capital-gains taxes, corporate taxes and sales taxes are all at or near the highest in the nation as well. The wealth-tax initiative would amplify the problem of revenue volatility by taxing volatile paper valuations while assuming the tax base will sit still when the bill arrives.
Proposition 13 was a warning about what happens when government treats unrealized gains like income. California shouldn’t need another tax revolt to remember it.
The Wall Street Journal‘s Editorial Board calls on the Trump administration to pause ICE’s operations in Minneapolis. Here’s its conclusion:
The violence in Minneapolis has erased the state’s welfare fraud from the headlines, which no doubt pleases Mr. Walz. It’s also given Democrats in Washington an excuse to shut down the government a second time over the Homeland Security funding bill.
Mr. Miller’s mass deportation methods are turning immigration, an issue Mr. Trump owned in 2024, into a political liability for Republicans in 2026. Americans don’t want law enforcement shooting people in the street or arresting five-year-old boys. The President who said you have to have a heart in enforcement ought to show some.
Jonah Goldberg tweets: (HT Scott Lincicome)
It’s so funny how effortlessly these cheerleading “conservatives” just embrace whatever ridiculous argument comes out of the administration without even a moment’s hesitation.
GMU Econ alum Matt Mitchell draws three lessons from the economic collapse of Venezuela. Two slices:
President Trump has accepted the Nobel Peace Prize that was awarded to Venezuela’s opposition leader, María Corina Machado. Unlike Machado, however, he does not accept the central lessons that can be gleaned from five decades of Venezuelan misrule.
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As the Cato Institute’s Marcos Falcone recently explained, one Venezuelan who seems to have internalized these lessons is María Corina Machado. As a decades-long leader of the opposition, she has consistently championed both personal and economic liberty. She traces much of the country’s corruption, mismanagement, and stagnation to its 1976 nationalization of the oil industry.
And she is wildly popular. In the unified opposition primary of 2024, she ran on a platform of complete oil privatization and won 90 percent of the vote. Maduro refused to let her run in the general election, so she backed Edmundo González Urrutia and he is estimated to have won 70 percent of the vote. But Maduro refused to recognize the result and clung to power.
Now, apparently, President Trump is in charge. But like Maduro before him, Trump refuses to recognize the results of the last election. He claims that Machado lacks the “respect” and “support” to lead. Polls, meanwhile, indicate that she is favored by more than 70 percent of the country. While accepting her re-gifted Nobel Prize, Mr. Trump has decided to give the reins to Maduro’s Vice President, the socialist Delcy Rodriguez, calling her a “terrific person” and predicting a great Venezuelan renaissance.
As for privatization, Trump instead says “we’re going to keep the oil.” He claims that Rodriquez will be “turning over” up to 50 million barrels to the US, the proceeds of which will be “controlled by me, as President of the United States of America.”
Meanwhile, he is strong-arming US oil companies to invest in the country, telling them that if they want to recover their property that was seized by President Andrés Pérez in 1976, they’d better cooperate in rebuilding Venezuela’s infrastructure. For their part, the companies have been reluctant to do so, citing the country’s poor track record of protecting private property.
Like Andrés Pérez, Chávez, and Maduro, Trump seems to imagine that the right central plan will unlock the country’s vast oil wealth. But history teaches a different lesson.
Why does President Trump call Venezuelan dictator Delcy Rodríguez “a terrific person,” despite her monstrous human-rights record and her reputation for corruption? It’s perplexing—until one considers that Chevron Corp. and Florida asphalt magnate Harry Sargeant have long lobbied the president for licenses to operate in Venezuela, and Ms. Rodríguez has been their counterpart in Caracas.
The Guardian reported last week that in October the U.S. began considering Ms. Rodríguez, right hand to then-dictator Nicolás Maduro, to replace him. The British newspaper said it learned from sources that she told the U.S. she was on board with the removal of her boss and ready to cooperate with Washington.
“One factor was her promise to work with American oil and her acquaintance with Americans in the oil business. ‘Delcy is the most committed to working with US oil,’ an ally of hers said.”
It’s no secret the fashion-conscious Marxist, who plays ping-pong when she isn’t running the narco-trafficking police state, has made inroads with foreign oil executives. Not all, of course. ExxonMobil and ConocoPhillips left the country years ago. But for those still making a buck off the repression of the Venezuelan people, she’s the ideal despot, more interested in power than ideology and therefore “flexible.”
Mr. Trump’s own obsession with oil might explain why he disparaged opposition leader María Corina Machado at a press conference the day the U.S. captured Mr. Maduro. He claimed the wildly popular Ms. Machado has neither “support” nor “respect” in Venezuela. That’s absurd. She is such a threat to the regime that it banned her candidacy for president in 2024. Edmundo González, who took her place, received 70% of the vote.
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After Ms. Machado presented her Nobel Peace Prize medal to Mr. Trump, he declared her a “wonderful woman,” and last week he said, “I am talking to her and maybe we can involve her in some way” in Venezuela. That’s big of him. Then he gushed again about the much-hated Ms. Rodríguez. Flying back from Davos, Switzerland, last week, Mr. Trump again engaged in moral equivalence: “I get along well with both sides.”
As Vague notes, Willing grasped principles of business that seem mundane to us but were rarely applied, or even recognized, in his day: diversification to reduce risk, and the two magics: the magic of the actuarial pool and the magic of compounding. Later, Willing invested in a then-new business, life insurance. Perhaps excited at the prospect not merely of profits but also of protecting widows, Willing penned a pamphlet: “An Address to the Citizens of Pennsylvania Upon the Subject of a Life Insurance Company.”
