Justin Wolfers: Trump’s $2,000 Tariff Dividend “Doesn’t Add Up”

“Populist Nonsense”: Justin Wolfers Tears Apart Trump’s Tariff Dividend Plan

In a fiery exchange on Prof G Markets, economist Justin Wolfers dismantled former President Donald Trump’s proposal for a $2,000 “tariff dividend” — calling it “absurd on its face” and “no way to govern a country.”

Wolfers, a professor of economics and public policy at the University of Michigan, described the plan as economically incoherent, comparing it to taxing Americans only to hand their own money back to them.

“Take money from Americans through tariffs, pull it in through the IRS, send it to the check-printing department, and send it out to Americans,” he said. “In the best possible scenario, we come out even.”

“In reality, is it a good idea for government to take money with one hand and then send it straight back out? No.”

What Trump Proposed

Over the weekend, Trump suggested creating a $2,000 “tariff dividend” for all Americans except high-income earners — claiming it would be funded by revenue from U.S. import tariffs.

He wrote on Truth Social:

“People who are against tariffs are fools. We are now the richest, most respected country in the world.”

But as Wolfers explained, the plan’s math doesn’t add up.

“We’re pulling in between $20 and $25 billion per month in tariff revenue,” Wolfers said. “He’s planning on sending out $600 billion in checks… The dividend he’s declared is more than all of it.”

“He said he’s going to use the rest to pay down the national debt. There’s no rest. It’s negative. The national debt’s going up.”

Why Economists Say Tariffs Are a Tax on Americans

Wolfers reminded viewers that tariffs function as consumption taxes — not as payments made by foreign countries.

“A tariff is a form of a consumption tax,” he explained. “Exactly the same logic that Republicans use to say we shouldn’t tax income also applies to taxing consumption — and also applies to tariffs.”

The idea that tariff revenues come from China or other countries, Wolfers said, is a misunderstanding:

“It’s a tax on Americans. It’s a tax on the importers as well. So if the argument is, ‘We got the money from foreigners,’ it’s just not true.”

“Show Your Work” — Wolfers Calls Out Lack of Policy Process

Beyond the math, Wolfers criticized what he called the absence of any serious economic review behind the proposal.

“There’s a standard way you do economic policy,” he said. “You come up with an idea, you ask your nerds to crunch the numbers, you talk to the Treasury, and then you release a 30-page background paper that explains the case.”

“That’s how it’s worked every day of my lifetime — except now.”

Drawing a sharp comparison, he added:

“My 13-year-old son is preparing for a middle school math exam. He has to show his work. My son is showing more of his work than the president.”

“If they’re not going to show their work, it’s because they haven’t done it. And we should stop pretending this is anything remotely serious.”

“Populist Nonsense” and Political Theater

When asked why Trump might propose such a policy, Wolfers said it looked like an attempt to win back public approval amid frustration over rising prices.

“People are realizing inflation’s rising, grocery bills are going up, and they’re connecting the dots — this is probably because we put a 20% tax on all the stuff we bring in,” he said.

Wolfers suggested the “tariff dividend” is more of a political signal than a real policy.

“He’s framing it as, ‘My policy is doing so much that I can afford to send some of it back to you,’” Wolfers said. “But the numbers aren’t even close. It’s not truthful. It’s arithmetic.”

“The Only Thing I Love About This Policy”

Despite his criticism, Wolfers admitted there was one aspect he liked — but for a reason that makes it even less likely to happen.

“One thing I don’t like about tariffs is that they’re regressive — poor people spend a larger share of their income,” he said. “But if you send out a flat $2,000 per person, that’s progressive — it redistributes toward working and middle-class Americans.”

“That’s how I know it’s not going to happen.”

He even joked about betting his own salary that the plan would never materialize.

A Broader Warning About Political “Nonsense”

Wolfers ended the segment with a serious point about how to handle economically unserious proposals:

“What do we do? What is our role? What truths can we tell? How seriously should we take nonsense?”

“It’s the president, but it’s nonsense. This is no way to govern a country.”

The interview closed with Wolfers reflecting on how absurd political rhetoric has become:

“I’ve never cracked a joke on national television. The only thing I’ve done is say things out loud — and it turns out if you describe our reality, it’s so absurd that people laugh.”