When the U.S. Supreme Court in February struck down most of President Donald Trump’s tariffs, the focus immediately turned to what to do with the money already collected from tariffs.
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The court didn’t provide any guidance about how the estimated $175 billion collected through tariffs would be refunded to importers, The Hill reported. Trump himself plans to continue imposing tariffs, regardless of the SCOTUS decision.
But what if those refunds trickled down to Americans, how would that shape people’s retirement plans?
Proposed Tariff Rebates
Congressional Democrats have some ideas on how to deal with tariff revenues — use the money to pay “tariff rebates” to eligible taxpayers. Those taxpayers include seniors who could probably use a boost to their retirement incomes.
As The Hill noted, a bill introduced by U.S. Rep. Henry Cuellar (D-Texas) calls for $231.5 billion in direct payments. In Cuellar’s district, the average payments would be about $1,020 for single tax filers, $1,530 for heads of households, and $2,040 for those who are married filing jointly.
Separate legislation introduced by a group of Democratic senators would issue rebate payments of up to $1,200 or more to qualified taxpayers.
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Don’t Spend the Money Just Yet
Before you get too excited about tariff rebates, it’s important to know that they’re probably a long shot. Congress would have to approve them, which means enough Republicans would have to go along. And Trump is unlikely to voluntarily refund tariff revenues.
There’s a “real possibility” Americans won’t receive refunds at all, said Chad Cummings, an attorney and certified public accountant (CPA) at Cummings & Cummings Law who previously worked in finance and tax.
“That is the most likely outcome given the inertia we are seeing from the executive branch on this,” Cummings told GOBankingRates. “Having said that, the $175 billion in IEEPA (International Emergency Economic Powers Act) tariff refunds should flow to importers of record, not consumers… The administration told the press it will fight those refunds in court.”
What Does It Mean for Seniors?
If tariff refunds do become a reality, seniors can expect a direct payment like other taxpayers. Such a payment would certainly be welcome, but for retirees, a rebate of $1,100 or so can only do so much.
“For retirees, the math is real,” Cumming said. “The 2.8% Social Security COLA adds about $56 per month to the average benefit, but the Medicare Part B premium increase of almost $18 per month absorbs a third of that gain before a retiree buys a single item… Retirees should not bank on relief from tariff refunds, and the meteoric rise in fuel prices (due to the Iran War) is insult to injury for those on a fixed income.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Tariff Refunds on the Way? What Seniors Can Expect for Their Retirement
