A new study has shockingly thrown President Donald Trump's $2,000 'tariff dividends' into question, which could mean people are left empty-handed.
After his controversial tariffs were lodged against US companies who want to import products from abroad, Trump revealed that the money that they were making thanks to the new tax, would be taken out as a dividend to split between the American public.
"We’ve taken in hundreds of billions of dollars in tariff money. We’re going to be issuing dividends," Trump said this month, claiming it could be paid out as soon as 'the middle of next year, a little bit later than that'.
The president said the payments would be given to those on 'low, moderate and middle incomes', but the criteria was not specified.
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Treasury Secretary Scott Bessent did, however, reveal to Fox News that Trump would need to pass legislation through Congress to approve the significant spending needs.
He added that the payout ‘would be for families making less than, say, $100,000'.
But even those people might not get the checks after a new study revealed that the cost to distribute the money to those who need it would surpass the amount the Treasury has to give.
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The new report - titled 'Tariff Dividends Would Cost More than Tariff Revenues Will Generate' - was published on November 18 by the US Tax Foundation.
It proposes three different tariff dividend models, concluding there was never a way to distribute $2,000 equally to those who need it, without increasing the federal budget deficit.
Here's the models it proposed:
- Option 1: $2,000 per person payments that have a hard cutoff of $100,000 for all tax filers - $279.8 billion
- Option 2: $2,000 per person payments that begin phasing out at a 5 percent rate above $100,000 for all tax filers - $320.9 billion
- Option 3: $2,000 per person payments that begin phasing out at a 5 percent rate above $150,000 for joint filers, $112,500 for head of household filers, and $75,000 for single filers - $347.6 billion
They then assessed how much it would cost if the dividends were also paid to tax filers' dependents and non-filers, which pushed costs up to $606.8 billion for option 3.
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The Committee for a Responsible Federal Budget also calculated that it could cost around $600 billion a year to administer the handout.
However, the Tax Federation revealed Trump’s new tariffs will ‘generate $158.4 billion in total revenue during 2025 and another $207.5 billion in 2026'.
If Trump was hoping to pay the dividends based on 2025 tariff revenues alone, he's $120 billion short for even the least generous tariff dividends model.
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"Most designs would absorb all the revenue generated so far, and most or all that will be generated in the next calendar year,” the Tax Foundation stated
“Under nearly any design option, sending out $2,000 payments to Americans would increase, not decrease, the federal budget deficit.
“A better way to provide relief from the burden of tariffs would be to eliminate the tariffs.”
UNILAD has contacted the White House for comment.
Topics: Donald Trump, US News, Money
Britt Jones