Americans are asking: When will people see lower taxes from the OBBBA, and how big will those spring refund checks be? And what’s the story with those $2,000 tariff refund checks? The Tax Foundation has some fact-checking on both points, with related commentary below the fold.
Erica York & Emily Kraschel, Is the OBBBA the “Largest Tax Cut in American History?,” Tax Foundation (Nov. 14, 2025):
While significant, the OBBBA is not the largest tax cut in American history; it’s the sixth largest. . . .
Looking at just the tax provisions and not the spending changes, the OBBBA reduces federal tax revenue by 1.4 percent of GDP over the 10-year budget window on average. It is much larger than the TCJA, which was the 10th largest tax cut at the time it was enacted (now the 11th as the OBBBA ranks above it), reducing revenue by 0.69 percent of GDP on average. . . .
Though it is a significant tax law, the reduction in tax revenue from the OBBBA ranks not as the largest, but as the the sixth largest tax cut in US history. Factoring in the president’s tariff tax increase further drops its ranking to the eighth largest tax cut in US history.
Erica York, Huaqun Li & Aleksei Shilov, Tariff Dividends Would Cost More Than Tariff Revenues Will Generate, Tax Foundation (Nov. 18, 2025)
President Trump has repeatedly called for sending $2,000 “tariff dividends” to low- and middle-income Americans, saying revenues from his increased import taxes can cover the cost and still pay down the debt. While doing so would require an act of Congress, and details on the proposed $2,000 payments have not been fully fleshed out, we model a range of options to illustrate the potential price tag and compare that cost to expected tariff revenues. . . .
We estimate the new tariffs will generate $158.4 billion in total revenue during 2025 and another $207.5 billion in 2026. That compares to an estimated cost of “tariff dividends” of between $279.8 billion and $606.8 billion, suggesting that most designs would absorb all the revenue generated so far, and most or all that will be generated in the next calendar year.
The Tax Foundation is not alone in this conclusion. Tariff Dividends Could Cost $600 Billion Per Year, Committee for a Responsible Federal Budget (Nov. 10, 2025):
While the President did not specify the frequency with which dividends would be paid, nor the precise amount (he said “at least $2,000 a person”), we estimate that $2,000 dividends would increase deficits by $6 trillion over ten years, assuming dividends are paid annually. This is roughly twice as much as President Trump’s tariffs are estimated to raise over the same time period.
Michael Rapoport, Big Challenges Stand in the Way of IRS Tariff Dividend Rebates, Bloomberg Law (Nov. 19, 2025):
Don’t go making plans just yet to spend the $2,000 tariff “dividend” rebates President Donald Trump has proposed for millions of Americans. . . .
The IRS already is dealing with a “moment of turbulence,” between multiple leadership and staffing changes and other challenges, and adding on the responsibility of issuing tariff rebates “would be very ill-timed,” said Erica York, vice president for federal tax policy at the Tax Foundation.
Some believe the agency is up to the task. The IRS’s workforce is “highly dependable” in the face of operational challenges, and “will get the rebates issued in a manner that should not significantly interfere with other IRS operations,” said Chuck Rettig, a shareholder at Chamberlain Hrdlicka who served as IRS commissioner in Trump’s first administration.
The government will have to address these logistical issues to get Americans any payments from tariff revenues.
Editorial Board, Trump’s Tariff Rebate Contradictions, Wall St. J. (Nov. 9, 2025):
Mr. Trump’s claim of a revenue benefit from tariffs [that would fund “dividends” to taxpayers] also belies what his Solicitor General, John Sauer, told the Supreme Court [in oral arguments for Learning Resources v. Trump]. In arguing that tariffs aren’t really taxes and are mainly a tool of foreign policy, Mr. Sauer said “these tariffs, these policies, it is clear that these policies are most effective if nobody ever pays the tariff. If it never raises a dime of revenue, these are the most effective use of these—of this particular policy.”
The bottom line, at least for now, is clear. D’Angelo Gore, Experts Raise Doubts About Trump’s Dividend Payment Proposal, FactCheck (Nov. 14, 2025):
Q: Will U.S. citizens receive stimulus or tariff-based checks of $2,000 in November?
A: No checks are being issued. . . .
Related TaxProf Blog coverage:
- New Federal Reserve Working Paper on Tariff Shocks and Tariff Policy (Nov. 18, 2025)
- Kamin: Tax Reform After the One Big Beautiful Bill Act (Nov. 11, 2025)
- WSJ Op-Ed and Letters: Business Tax Reform and Tariffs (Oct. 25, 2025)
- Clausing: Trump Pushes Tariffs To Shift The Tax Burden From The Rich To The Poor And Middle Class (Feb. 24, 2025)
- NY Times: Trump’s Proposed Tax Cuts And Increased Tariffs Could Hurt Poorer Households (July 22, 2024)
