President Donald Trump’s proposal to send $5,000 payments to U.S. adults would cost roughly $1.25 trillion if broadly available, far more than the annual revenue expected from his administration’s tariffs, according to a new Tax Foundation analysis.
Trump announced the proposed “dividend” during the Republican National Convention in Dallas, saying adult U.S. citizens would receive $5,000 if Republicans maintain control of both the House and Senate in the November midterm elections. House Speaker Mike Johnson said this week that congressional approval would be required before such payments could be issued. AP News
The Tax Foundation, a Washington-based tax policy research organization, estimated that providing $5,000 to 250 million adults would cost about $1.25 trillion if there were no income limits or other eligibility restrictions. The proposal, as announced, has not specified those restrictions.
That compares with an estimated $125 billion in net federal revenue from Trump’s new tariffs in 2027, according to the Tax Foundation’s analysis. On that basis, one year of tariff revenue would cover only about one-tenth of the estimated cost of sending payments to all eligible adults.
The organization estimated the tariffs would generate about $1.4 trillion in net revenue over the 10-year period from 2026 through 2035 if the policies remain in place. Its analysis concluded it would therefore take close to a decade of tariff collections to cover the cost of a single round of $5,000 payments.
The Tax Foundation distinguishes net tariff revenue from the gross amount collected at the border. It said tariffs can reduce imports subject to existing duties and can also lower revenue from other federal taxes, including income and payroll taxes, reducing their overall fiscal impact.
Tariff collections have nevertheless increased substantially since the administration imposed new import duties. The Tax Foundation reported customs duties rose from $79 billion in calendar year 2024 to $264 billion in 2025.
Collections became more volatile in 2026 as the federal government issued refunds associated with tariffs struck down by the U.S. Supreme Court. The report’s Treasury data showed those refunds sharply reducing net customs receipts during several months.
The fiscal question is significant because the federal government is already projected to run a deficit of nearly $1.9 trillion in fiscal 2027, according to figures cited in the report. The Tax Foundation calculated that spending more than $1 trillion on the payments could push the deficit close to $3 trillion, even after accounting for tariff revenue.
The organization also argued that a deficit-financed payment program of that size could increase inflationary pressure and borrowing costs. Those are the Tax Foundation’s economic conclusions rather than certain outcomes, and the effects would depend in part on how Congress structured and financed any legislation.
Trump and Vice President JD Vance have pointed to tariff revenue as a possible source for the payments. Trump tied the proposal to Republican control of Congress, but Johnson said congressional authorization would still be necessary. AP News
No detailed legislation establishing eligibility, income limits or a payment schedule has been enacted. For now, the $5,000 dividend remains a proposal rather than an approved federal benefit.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to news@fingerlakes1.com.