US Commerce Secretary Howard Lutnick has said President Donald Trump’s proposed $5,000 “dividend” for American adults would not be funded through ordinary tax revenue, as questions continue over how such a massive payout could be financed.
Trump announced the proposal at the Republican midterm convention in Dallas, saying every adult US citizen would receive $5,000 if Republicans retain control of both the House and Senate in November. He did not initially provide a detailed funding mechanism.
Where Would the $5,000 Come From?
Speaking to NBC News, Lutnick said the money would not come from taxpayers or be added to the deficit.
“It’s not tax money,” he said, arguing that the administration could generate the money through other government-backed revenue streams.
Lutnick pointed to a planned programme aimed at wealthy foreign nationals willing to pay large sums for immigration benefits, saying it could generate substantial revenue. He also cited gains from the federal government’s investment in chipmaker Intel as an example of how the government could potentially raise money outside conventional taxation.
However, no detailed financing plan has yet been formally introduced.
Trump’s ‘Dividend’ Promise
Trump said the proposed payment would be made only if Republicans retain control of both chambers of Congress.
“If the Republicans win the House of Representatives and the United States Senate, both of them, I will issue a dividend to every adult citizen in the United States of America for $5,000,” he said.
Trump also said the money would have to be spent in the United States.
Vice President JD Vance has suggested that tariff revenue could potentially help finance the payments, while administration officials have floated other possible sources.
The $1.25 Trillion Question
The biggest concern is the sheer cost.
The Tax Foundation estimates that a $5,000 payment to roughly 250 million eligible adults would cost about $1.25 trillion. It also estimates that Trump’s new tariffs would raise only about $125 billion in net federal revenue in 2027 — roughly one-tenth of what would be needed for the proposed payout.
That means tariff revenue alone would not be enough to fund the programme unless eligibility were significantly restricted or additional funding sources were found.
The proposal would also require congressional approval before any payments could be issued.
Tariff Revenue Faces Another Problem
Trump and Vance have repeatedly pointed to tariffs as a potential source of funding, but that option has become more complicated.
The US Supreme Court ruled in February 2026 that the International Emergency Economic Powers Act did not give the president authority to impose the so-called “Liberation Day” tariffs, significantly reducing the tariff revenue the administration had expected to collect.
The Tax Foundation has also previously concluded that even a smaller $2,000 tariff-funded dividend would cost more than the tariff revenue expected to be generated.
Still Only a Proposal
For now, the $5,000 “Trump Dividend” remains a political proposal rather than an approved federal programme.
No legislation setting out eligibility rules, payment dates or a final funding mechanism has been passed.
Lutnick’s comments have provided more clues about how the administration might try to finance the idea, but the central question remains: whether enough non-tax revenue can realistically be generated to cover a programme that could cost more than $1 trillion.
