Trump’s Tariff Windfall Should Go to Parents
President Trump has floated the idea of sending $2,000 checks to most Americans, funded by tariff revenue. The idea is to show Americans very directly how much the country is benefiting from the billions being paid in import duties.
But a lump sum payment of $2,000 is not the best use of tariff revenue. Injecting a massive stimulus regardless of need risks fanning the flames of inflation. It’s likely that the Federal Reserve would seek to offset any boost in spending enabled by the check with higher interest rates.
resident Donald Trump speaks in the Oval Office on Oct. 16, 2025, in Washington, DC. (Francis Chung/Politico/Bloomberg via Getty Images)
A better use of tariff revenue would be to dramatically expand the Child Tax Credit—delivered as quarterly payments rather than a year-end refund. This would provide meaningful, sustained support to families raising the next generation while avoiding the inflationary risks of universal cash payments.
The math is straightforward. Tariffs are bringing in roughly $240 billion annually. The current Child Tax Credit costs about $120 billion per year and provides $2,000 per child. Instead of scattering money indiscriminately, we could use approximately $160 billion of that tariff revenue to restructure the credit this way:
- $3,000 for the first child,
- $4,000 for the second child,
- $6,000 for the third child,
- and $8,000 for the fourth and each additional child.
The additional amounts above the current $2,000 baseline would be non-refundable—available only to families with tax liability. The idea is to provide tax relief rather than create another welfare program. Poorer families without tax liabilities would still get the existing refundable credit.
Turning Tariff Revenue into a Pro-Family Tax Cut
Consider what this means in practice. A family with three children currently receives $6,000 annually through the CTC. Under this expansion, they’d receive $13,000, an additional $7,000. Delivered quarterly, that’s $3,250 every three months. For a family with four children, the total rises to $21,000, or $5,250 per quarter.
These aren’t trivial amounts. They represent meaningful support for families facing the actual costs of raising children: childcare that runs $10,000-$15,000 per child annually in many areas, rising food and clothing costs, educational expenses, and the countless other outlays that come with each additional child.
Compare this to the proposed $2,000 universal checks. A family with four children would get $2,000 once. Under this alternative, they’d get $21,000 spread over the year. Which would actually help them manage the ongoing expenses of raising their family?
The quarterly delivery mechanism matters. Rather than a one-time payment that hits the economy all at once—potentially driving up prices—quarterly payments align with the rhythm of family expenses. Parents need support in June for summer activities and in September for back-to-school costs, not just in April when they file their taxes. Spreading payments over time also reduces inflationary pressure by avoiding a sudden spike in aggregate demand.
There’s a deeper logic to this structure. By making the additional amounts non-refundable and removing phase-outs at high income levels, this proposal targets families who are both paying substantial federal income taxes and raising multiple children. These are precisely the families that get squeezed hardest under current policy.
Current policy claims to value family formation but does almost nothing to support it where it matters most. The existing Child Tax Credit phases out starting at $400,000 for married couples—not exactly a fortune when you’re raising multiple children in an expensive area. This expansion would remove those phase-outs, providing meaningful support to families regardless of income level, as long as they’re paying taxes.
The contrast with universal checks is stark. Universal payments encourage consumption, which might make sense when the economy is slumping due to inadequate demand. It doesn’t make sense when the economy is growing rapidly and inflation remains stubbornly high. Family tax relief rewards investment in the future. Every child represents not just 18 years of expenses, but a future worker, taxpayer, and contributor to economic growth. If the goal of tariff policy is to rebuild American productive capacity, using the revenue to support American family formation is entirely consistent with that objective.
This is also a better policy design than universal checks from an economic perspective. One-time payments tend to fuel spending surges as recipients treat them as windfalls. Research on previous stimulus programs shows that consumers spend a larger share of one-time payments than they do of regular income. Quarterly family payments, by contrast, are more likely to be incorporated into household budgets and used for necessary expenses rather than discretionary splurges.
The political advantages are significant too. It’s more defensible to fiscal conservatives because it’s structured as tax relief for families with tax liability, not an expansion of the welfare state. And it gives Republicans something concrete on family values beyond rhetoric about the importance of marriage and children.
The current debate over what to do with tariff revenue reveals a broader confusion about policy goals. It’s admirable to want to show Americans more directly the benefits of tariffs. But just doing that is short-sighted. We should aim higher by supporting American families and encouraging marriage, having children, and raising the next generation.
Trump has made American renewal a central theme of his presidency. But renewal requires more than just reshoring factories and renegotiating trade deals. It requires families willing and able to have children. That won’t happen if policy continues to squeeze families with substantial tax burdens while offering minimal support for the enormous expenses of raising multiple children.
The $2,000 checks would make headlines for a week and then be forgotten. Quarterly payments that actually help families manage the costs of raising children would be policy that matters. If we’re going to use tariff revenue for tax relief, let’s use it in a way that advances actual policy goals rather than just generating a news cycle.
Read the full article here