Trump Dividend Checks
On the campaign trail for GOP members of Congress, President Trump has stated that the federal government will pay every American adult $5,000 if Republicans retain control of both the House and the Senate after November's midterm elections. Questions have arisen over whether the American promise can legally follow through with this promise and whether the plan would be feasible from a practical standpoint.
We asked two professors and authors of ALM's Tax Facts with opposing political viewpoints to share their opinions about the viability and legality of Trump's proposal to issue dividend checks if Republicans retain control of Congress.
Below is a summary of the debate that ensued between the two professors.
Their Votes:
Their Reasons:
Byrnes: It would absolutely be legal for Trump to pay every American $5,000 if Republicans retain control of the House and Senate. First, the proposal would pay every American--not only Americans who elect to vote Republican, meaning that the plan can't really be viewed as bribing Americans to vote a certain way.
Bloink: This proposal is absolutely illegal and can only be viewed as an attempt to bribe the American people to reinstate a failing GOP and allow them to continue their control of the House and Senate. The fact of the matter is that the economy is a major concern and that's all because of the policies implemented by the GOP during the first half of Trump's second term. Americans know that they're struggling because the GOP has prioritized tax cuts for the wealthy and what seems to be an unending war with Iran over the financial wellbeing of lower and middle-income taxpayers.
_________________________________
Byrnes: Sure, it would be illegal to bribe Americans to influence the way they vote in a federal election. That's not what President Trump and the GOP are proposing. This is simply another campaign promise--akin to a promise to reduce taxes or provide healthcare subsidies. No real difference exists between promises to change policies and promises to provide Americans with the additional financial support that they need during this challenging time.
Bloink: This empty-shell promise will never come to fruition of course--Congress simply would not agree to it. The cost would be astronomical (at some estimates, roughly $1.3 trillion) and even Republicans would agree that these payments would only cause the national debt to spiral even further out of control. There's no way that the fiscal hawks within the GOP party would ever vote to approve these "dividend" checks.
_________________________________
Byrnes: The payments would not expand the national debt because tariff revenues could be used to pay them. Imposing tariffs has been extremely effective and allowed the government to raise enough money to offset the costs of these Trump dividends. We have the excess capital to make good on this promise should the GOP retain control of the House and Senate this November.
Bloink: We can't believe that tariff revenues will be used to fund these would-be dividend checks. According to some estimates, Trump's tariffs raised something along the lines of $500 billion—all of which funded by American businesses that now continue to struggle with the back-and-forth over tariffs. The dividend checks would cost nearly three times that amount. Trump has also been forced to refund roughly $100 billion in tariff revenue generated by tariffs that have since been declared illegal. Should these dividend checks ever really become reality—and I strongly doubt that they will—they'll add directly to the already-spiraling national debt.