Trump's $5,000 'Dividends' Are a Brazen Vote-Buying Scheme
· Reason
Behind the battles over ideas and policy proposals, at its core, democratic politics is about buying votes. Sometimes, vote-buying is overtly a cash for ballots arrangement. But in the United States, votes have more often been purchased with the promise of "free" goods and services, paid for through taxes or, increasingly, by running up debt, and justified by empty verbiage about the public good that the scheme will allegedly promote. That makes President Donald Trump's promise of $5,000 "dividend" payments to Americans if his party wins the midterms a jarring return to the open corruption of the politics of the past—or of other country's present experiences.
Dividends for Everybody, If Republicans Win
"If the Republicans win the House of Representatives and the United States Senate—both of them—because of our tremendous economic success….I will issue a dividend to every adult citizen in the United States of America for $5,000. Very much like a successful company will do a cash distribution to its shareholders," President Trump told attendees at the Republican midterm convention last week. "The reason the Democrats can't do that is because they don't do tariffs," he added.
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Democrats may not do tariffs—at least not to the extent as modern Republicans (the Democratic Biden administration was very protectionist, but not to the same degree as Trump)—but tariffs aren't going to pay those "dividends" anyway. The expense is too vast to be covered by the proceeds of trade barriers.
"Issuing this dividend in 2027 would cost the federal government over $1.2 trillion, which is far more than all three COVID-era stimulus payments combined, the projected cost of the President's signature One Big Beautiful Bill Act (OBBBA) next year, and is 50% larger than the entire primary deficit projected for 2027," notes the Committee for a Responsible Federal Budget. "Indeed, a one-time $5,000 dividend would more than double next year's projected $780 billion primary deficit to $2 trillion and increase total projected deficits to $3.1 trillion."
That's a lot of money—more than the amount generated by the tariffs Democrats supposedly don't do.
Tariffs Might Cover One-Tenth of the Cost
"By our estimates, the revenue raised by the new tariffs in 2027 would cover only about one-tenth of the cost of the promised $5,000 dividend payment. It would take almost a decade of collections from the tariffs to cover the cost," warns Erica York of the Tax Foundation.
"Furthermore, net tariff revenue has been negative since May, as the government has had to refund the tariffs invalidated by the Supreme Court earlier this year," comments the Cato Institute's Alfredo Carrillo Obregon. "In sum, even setting aside the legal and practical obstacles to using this money, the idea that tariff revenue can fund this one-time payment is simply not realistic."
Worse, Trump equated the promised $5,000 payments to the cash distributions made to shareholders by successful companies. But the federal government is far from a profitable business. U.S. national debt, run up over decades as the government consistently spends more money than it collects, now exceeds $40 trillion. The current fiscal year's deficit is estimated at $2 trillion as of the end of August. By any rational standards, the federal government has no profits on which to pay dividends. Politicians should, instead, consider ways to dig the government out of the hole they've created rather than heaping further burdens on Americans to be paid at an unnamed date in the future.
A History of Transactional Politics
In other words, the president's promised payments are no sort of dividends. They're offers of money to be paid if the president's political allies win the midterm elections. The so-called "dividends" are bribes, and there's a long and sleazy history of such payments.
Two years ago, the Jamaica Observer's Arthur Hall reported well-founded mutual accusations by the island nation's two main political parties of illegal vote-buying with cash and food. A veteran member of parliament told Hall that "those demanding payment for their votes are mostly in the younger generation, who are the future" and that "elections are becoming more and more transactional."
Such behavior isn't exactly unknown in our country. To secure a seat in colonial-era Virginia's House of Burgesses, future president George Washington sent representatives to polling places with 160 gallons of booze and mugs for voters to drink from. He won with 310 votes. That's a lot of alcohol per vote, but not anywhere near $5,000 worth.
By the end of the 19th century, the secret ballot was introduced to reduce opportunity for both intimidation and bribery to influence electoral outcomes.
Now, American politicians usually avoid direct offers of payment for individual ballots. Instead, they make extravagant policy promises, to be funded by taxes on unpopular segments of society or just by additional borrowing, in hopes of swaying enough of the electorate to make a difference.
President Franklin Roosevelt admitted to his advisers that the funding structure of his expensive and now tottering Social Security program made little economic sense. It was, he said, "straight politics" to get the public committed to the program.
Predictably, President George W. Bush's plan to privatize Social Security subsequently proved unpopular. So, he shifted to a crowd-pleasing and very expensive plan to add drug benefits to Medicare.
In 2007, then-Sen. Hillary Clinton (D–N.Y.) proposed a (coincidentally) $5,000 tax-funded "baby bond" for every child born in the country. The idea isn't much different from the Trump accounts that jump-start investment accounts for children with $1,000 in tax money.
The Biden administration repeatedly pushed to forgive hundreds of billions of dollars in student loans in an effort widely castigated as a vote-buying scheme.
A Return to Overt Vote-Buying
These plans, and many more besides, were framed as sincere policy proposals to alleviate problems and improve the country. There probably were some good intentions motivating the push to pass them, even when they made little economic or moral sense. But, overall, their formulation and passage were driven by the desire to purchase public support with the prospect of goodies paid for by somebody else.
Trump's promise of $5,000 to each voter "if the Republicans win the House of Representatives and the United States Senate" strips away the façade and returns to the practice of openly buying votes. Importantly, tariffs will definitely not cover the cost.
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