Remember when 3D televisions were going to be the next big thing? Some were willing to splash out thousands for the thrill of watching Avatar in all its multi-dimensional glory at home, but once these televisions actually hit the market, the truth seeped out. They were expensive, not that good, and quickly lost the hype.
Ever the salesman, President Trump is hawking a similar product, but this one may face a different fate. His indiscriminate, global tariffs cost the typical family $1,100 per year. They have held back American manufacturing. They are widely unpopular.
So, obviously Democrats want to repeal the tariffs, right?
Wrong, and that’s a mistake. California Governor Gavin Newsom recently admitted he “can’t guarantee that” Democratic leadership would reverse Trump’s latest tariffs on Canada. House Minority Leader Hakeem Jeffries is more subtle, pledging that a Democratic-led House would “restore Congressional authority as it relates to tariffs,” which is decidedly not a pledge to undo the tariffs. Why? Because while Trump’s tariffs raise prices, harm American manufacturing, and anger voters, they do one thing that Democrats need to advance their agenda: raise federal revenues.
The tariffs President Trump has implemented in his second term will bring in an estimated $150 billion per year. That is serious cash, equal to the annual cost of SNAP benefits and Section 8 housing vouchers combined. Tariffs, remember, are a tax. While some argue about who pays the tax, there’s no question who collects it: Uncle Sam.
If Democrats take the White House and Congress in 2028, they may be loath to give up that revenue source. Last month, the United States’ federal debt crossed $40 trillion, and it’s growing at a rate that economists on both sides of the aisle say is unsustainable. In 10 years’ time, the government will spend $2.1 trillion on servicing debt, nearly double what it will on defense.
Beyond the debt, there’s another fiscal calamity coming down the pike: In 2032, the Social Security trust funds will be exhausted, meaning 22% cuts to benefits across the board unless Congress patches up the program’s finances or cuts benefits. If the government does not get its house in order, borrowers will demand higher yields, pushing up interest rates across the economy.
A future Democrat-run government will need to raise significant revenues to fix America’s balance sheet, let alone deliver on campaign promises to reverse Trump’s health care cuts, invest in housing, or expand childcare. But adopting President Trump’s trade policy would be an unwise way to do so. Yes, there is a short-term appeal in capturing tariff revenues, but over time, tariffs stymie economic growth, cost jobs, and raise prices. They are regressive — affecting lower-income families more — and increase poverty. What’s more, in practice, other countries retaliate against tariffs, and the federal government ends up spending billions of dollars to support affected groups like farmers.
There are better ways to raise federal revenues. To match the money Trump’s tariffs are bringing in, Democrats could do two things. First, raise the corporate tax rate from 21% to 28%, as President Biden proposed. This would hardly be radical; the corporate tax rate was 35% in 2017 before President Trump slashed it. Second, close loopholes that allow wealthy heirs to inherit colossal estates tax-free. Right now, if a billionaire’s collection of stocks, mansions, and Picassos grows in value by $10 billion over their life and they leave it for their heirs, their family can easily avoid ever paying any meaningful taxation on the extraordinary gains.
Beyond these two ideas, there are many more options to help get the country’s fiscal house in order. For example, without even changing tax policy, we could better enforce the laws on the books. President Trump and DOGE neutered the IRS after Democrats had given the agency the resources and mandate to go after wealthy tax cheats, such as those who were taking write-offs on using their corporate jets for personal trips. Simply reversing Trump’s cuts to the IRS could raise $86 billion a year.
There is no need to double down on the unwise ideas of a historically unpopular president. Yes, Democrats may inherit a Republican-caused budgetary crisis again, but they don’t need to keep bad policies, too.
Samarth Gupta is a columnist for The Caucus. He served in the Treasury Department under President Biden from 2022 to 2025. A Rhodes Scholar, he is a policy fellow at the Roosevelt Institute and the Stanford Institute for Economic Research & Policy.