Trump's $5,000 dividend would cost far more than tariffs raise

Trump made the pledge Wednesday night during his nearly two-hour speech at the Republican Party's midterm convention in Dallas.

"If the Republicans win the House of Representatives and the United States Senate, I will issue a dividend to every adult citizen in the United States of America for $5,000," he said.

He compared the payment to a company returning cash to its shareholders and said the money would have to be spent in the United States.

Vice President JD Vance defended the proposal in a Fox News interview after the speech, calling it "fundamentally a dividend for American workers." He pointed to tariff revenue as the source.

"We're taking an extraordinary amount of revenue because the president of the United States is standing up to both foreign companies but also foreign countries who have been taking advantage of America's workers," Vance said.

He also suggested wealthy Americans could be excluded from the payments, which would lower the cost.

In a statement, White House spokesman Davis Ingle told The Center Square that "President Trump has consistently proven his doubters wrong," citing the administration's trade and economic record. A separate release from the White House Office of Communications said the payment was "made possible by the strength of the American economy." Neither addressed how the dividend would be funded or whether it would require congressional approval.

The dividend would cost about $1.2 trillion for a single round of payments, according to the Committee for a Responsible Federal Budget, which estimated the figure at more than 3.5% of gross domestic product. The Tax Foundation, in a separate analysis, put the cost at about $1.25 trillion, based on 250 million adults.

Net customs revenue totaled about $195 billion in fiscal year 2025, according to the Treasury Department's monthly statement, and has run lower this year.

Alex Durante, a senior economist at the Tax Foundation, told The Center Square the tariffs could not raise enough to cover the payments even in theory. The group projects the tariffs will bring in about $1.4 trillion over the next decade, and estimated that a single year's tariff revenue would cover only about a tenth of the dividend's cost.

"It would take almost a decade of collections from the tariffs to cover the cost," the foundation wrote in an analysis published Wednesday. Tariff revenue is also already counted toward existing deficit projections, the Committee for a Responsible Federal Budget said, "so it cannot serve as a pay-for to offset the costs."

The tariff money Trump pointed to is also shrinking. After the U.S. Supreme Court struck down the president's International Emergency Economic Powers Act tariffs in February of this year, the government began refunding the duties to importers.

Importers had paid about $166 billion under that authority, according to a Customs and Border Protection court declaration, and the government has since returned billions of dollars. Net customs revenue has turned negative in some recent months, according to the Treasury statement, as refunds outpaced new collections.

Those refunds go to importers, not consumers, and are separate from the proposed dividend, but they reduce the government's net customs-duty receipts, the same broad revenue source the administration has cited to pay for the $5,000 payments.

Any dividend would require congressional authorization and funding, and Congress has not advanced such a program. Sen. Josh Hawley, R-Mo., introduced the American Worker Rebate Act in July 2025 to authorize tariff rebates, but the bill has sat in the Finance Committee since, with no cosponsors and no action.

A competing measure from Sen. Martin Heinrich, D-N.M., remains in the same committee, with eight Democratic cosponsors. Trump proposed the $2,000 tariff dividend last year and once said he could send the payments "without Congress," but they never went out.

The Treasury Department, asked whether it has the legal authority to pay dividends from tariff revenue without an appropriation, did not respond by publication.

Trump has now floated three direct-payment proposals to Americans since February 2025, the DOGE savings rebate, the $2,000 tariff dividend, and the $5,000 dividend, none of which has reached taxpayers. The newest is the largest, and it depends on both a Republican victory in November and a revenue source that, by independent estimates, cannot cover it.