How About a Tariff Dividend for Taxpayers?

How about … a tariff dividend for taxpayers?President Trump’s trade reciprocity policy is exactly the right approach to level the playing field and fight the predatory export policies from so many of our trading partners.Places like Communist China and Vietnam have used high tariffs and cheap wages to attack the American economy.The European Union uses a high tariff and regulatory stranglehold to keep out American exports.This must change.So, Mr. Trump’s reciprocity policy is increasing the charges on foreign countries that have abused the world trading system.Now, the White House is estimating that the increase in American tariff charges could yield roughly $600 billion a year.Of course, if foreign exporters eat the tariffs and cut their prices, revenues may be lower.Or, if American businesses fear a consumer boycott of higher prices, they may cut their profit margins — and that too would lower the revenue estimate.However this all turns out, though, $600 billion is a lot of cash.It’s roughly 2 percent of gross domestic product, and many economists believe it will weaken the economy.So here’s a solution: there’s more than enough tariff revenue to lower taxes.Take those $600 billion in tariff charges — and turn it over to taxpayers.And do it right away.This idea of a tariff dividend for taxpayers is not yet part of the one, big, beautiful bill circulating through the House and Senate — because, well, it was only yesterday that Mr. Trump unveiled his plan.Yet I believe the $600 billion in potential tariff revenues should be plugged into the Republican budget resolution — so that it can finance large-scale new tax cuts for middle-class blue-collar families, who may have some trouble with the transition to a new trade policy.Or they have suffered over the past four Biden years — where prices went up much higher than wages.Actually, real wages have hardly moved in nearly 25 years.So if Mr. Trump’s reciprocal trade policy produces a big chunk of change, then why not distribute it to the workforce that’s carried the burden for so long?Why not, say, collapse the bottom three tax brackets of 10 percent, 12 percent, and 22 percent, into perhaps a 15 percent tax rate with a high income threshold maybe reaching $100,000 a year.Then take the middle brackets — 24 percent, 32 percent, and 35 percent — and collapse that into one bracket around 28 percent — that would reach all the way up to perhaps $500,000 in annual income.And while they’re at it, cut the made in America corporate rate all the way down to perhaps 10 percent or even less.And make sure the top income tax rate is dropped to around 35 percent.And remember — small businesses pay THAT income tax rate.The great Steve Forbes has been promoting this kind of pro-growth tax simplification for quite some time.Flatten the rates — and broaden the base.Congress should get on this right away.A $600 billion tariff dividend to tax payers could avoid recession and launch an unbelievable blue-collar boom.Let’s get moving.From Mr. Kudlow’s broadcast on Fox Business Network.

How About a Tariff Dividend for Taxpayers?

How About a Tariff Dividend for Taxpayers?

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