President Donald Trump is pressing ahead with his idea to send Americans a “tariff dividend” refund in 2026, even as questions mount about the math behind the plan.
During a more than two-hour Cabinet meeting on Tuesday, Dec. 2, Trump again pitched the proposal and dismissed concerns about everyday costs, calling the affordability debate a “Democrat scam.”
“Next year is projected to be the largest tax refund season ever, and we’re going to be giving back refunds out of the tariffs, as we have taken in literally trillions of dollars,” Trump said early in the meeting. “We’re going to be giving a nice dividend to the people in addition to reducing debt.”
He went even further, suggesting that tariff revenue might one day grow so large that it could replace the federal income tax. “Whether you get rid of it or just keep it around for fun or have it really low, much lower than it is now, but you will not be paying income taxes,” Trump said.
Those comments came as the Congressional Budget Office (CBO) revised its outlook for tariff revenue. On Nov. 15, the CBO cut its projection for tariff collections over the next decade from $3.3 trillion to $2.5 trillion. The lower take would also mean an estimated $500 billion more in interest costs on the national debt, for a combined $3 trillion in overall value to the government.
Critics argue that this leaves little room for big cash payouts to households. The non-partisan, not-for-profit Committee for a Responsible Federal Budget estimates that Trump’s tariffs will generate roughly $300 billion per year, while a single round of tariff dividends could cost about $600 billion. In the group’s view, “additional tariff revenue should be used to reduce deficits … instead of passing that revenue onto taxpayers in the form of cash dividends.”
Will Americans See $2,000 Tariff Checks?
Trump has been teasing the idea of tariff rebate checks since July, saying that money collected from the levies he began rolling out in March and April could fund “a little rebate,” while the main goal would be to “pay down debt.”
More recently, he has said those checks would go out “probably in the middle of next year” and could be worth “thousands of dollars for individuals of moderate income, middle income.”
Independent analysis suggests that may be a stretch. The Tax Foundation, another non-partisan, non-profit organization, estimates that Trump’s tariffs will raise about $2.1 trillion over the next 10 years — but that figure falls to $1.6 trillion once foreign retaliation and other economic side effects are taken into account. That smaller pot of money makes large, recurring rebate checks harder to afford.
There is also a legal cloud hanging over the tariffs themselves. On Nov. 5, the Supreme Court heard arguments on whether Trump has the authority to impose them in the way he has, with several justices appearing skeptical.
If the tariffs survive that challenge, any broad-based refund program would still need congressional action, Treasury Secretary Scott Bessent said on Nov. 16 in an interview with Maria Bartiromo on Fox News’ “Sunday Morning Futures.”
Why Push Tariff Dividends Now?
One likely reason is that Americans have been footing at least part of the bill. On Nov. 14, speaking to reporters aboard Air Force One, Trump acknowledged that tariffs “may in some cases” raise prices after he signed an executive order exempting certain agriculture products — including bananas, coffee and beef — from reciprocal tariffs he imposed on April 2.
Even so, he insisted that the burden has “to a large extent … been borne by other countries.”
The Tax Foundation’s calculations tell a different story for U.S. households. The group estimates that Trump’s tariffs amount to a tax increase of about $1,100 per household in 2025 and $1,400 in 2026.
From their perspective, sending out checks is not the most efficient fix. Rather than issuing tariff dividends, the organization argues, “a better way to provide relief would be to simply repeal the tariffs altogether.”
