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Don't Count on Tariff Rebate  11/12 06:30

   Math doesn't work on suggested tariff rebates.

   WASHINGTON (AP) -- President Donald Trump boasts that his tariffs protect 
American industries, lure factories to the United States, raise money for the 
federal government and give him diplomatic leverage.

   Now, he's claiming they can finance a windfall for American families, too: 
He's promising a generous tariff dividend.

   The president proposed the idea on his Truth Social media platform Sunday, 
five days after his Republican Party lost elections in Virginia, New Jersey and 
elsewhere largely because of voter discontent with his economic stewardship -- 
specifically, the high cost of living.

   The tariffs are bringing in so much money, the president posted, that "a 
dividend of at least $2000 a person (not including high income people!) will be 
paid to everyone.''

   Budget experts scoffed at the idea, which conjured memories of the Trump 
administration's short-lived plan for DOGE dividend checks financed by 
billionaire Elon Musk's federal budget cuts.

   "The numbers just don't check out," said Erica York, vice president of 
federal tax policy at the nonpartisan Tax Foundation.

   Details are scarce, including what the income limits would be and whether 
payments would go to children.

   Even Trump's treasury secretary, Scott Bessent, sounded a bit blindsided by 
the audacious dividend plan. Appearing Sunday on ABC's "This Week" Bessent said 
he hadn't discussed the dividend with the president and suggested that it might 
not mean that Americans would get a check from the government. Instead, Bessent 
said, the rebate might take the form of tax cuts.

   The tariffs are certainly raising money -- $195 billion in the budget year 
that ended Sept. 30, up 153% from $77 billion in fiscal 2024. But they still 
account for less than 4% of federal revenue and have done little to dent the 
federal budget deficit -- a staggering $1.8 trillion in fiscal 2025.

   Budget wonks say Trump's dividend math doesn't work.

   John Ricco, an analyst with the Budget Lab at Yale University, reckons that 
Trump's tariffs will bring in $200 billion to $300 billion a year in revenue. 
But a $2,000 dividend -- if it went to all Americans, including children -- 
would cost $600 billion. "It's clear that the revenue coming in would not be 
adequate," he said.

   Ricco also noted that Trump couldn't just pay the dividends on his own. They 
would require legislation from Congress.

   Moreover, the centerpiece of Trump's protectionist trade policies -- 
double-digit taxes on imports from almost every country in the world -- may not 
survive a legal challenge that has reached the U.S. Supreme Court.

   In a hearing last week, the justices sounded skeptical about the Trump 
administration's assertion of sweeping power to declare national emergencies to 
justify the tariffs. Trump has bypassed Congress, which has authority under the 
Constitution to levy taxes, including tariffs.

   If the court strikes down the tariffs, the Trump administration may be 
refunding money to the importers who paid them, not sending dividend checks to 
American families. (Trump could find other ways to impose tariffs, even if he 
loses at the Supreme Court; but it could be cumbersome and time-consuming.)

   Mainstream economists and budget analysts note that tariffs are paid by U.S. 
importers who then generally try to pass along the cost to their customers 
through higher prices.

   The dividend plan "misses the mark,'' the Tax Foundation's York said. "If 
the goal is relief for Americans, just get rid of the tariffs.''