Supreme Court Tariff Ruling: IEEPA Revenue and Potential Refunds
We project that reversing the IEEPA tariffs will generate up to $175 billion in refunds. Unless replaced by another source, future tariff revenue collections will fall by half.
Lysle Boller is an economist with expertise in international corporate taxation. His research interests lie at the intersection of public economics and industrial organization, with a focus on how firms respond to incentives created by the global tax system. Prior to joining PWBM, Lysle worked as a researcher at the Yale School of Management and as an economic consultant for Compass Lexecon.
Lysle received his Ph.D. in economics from Duke University, as well as an M.Sc. in economics from the London School of Economics and a B.A. in mathematics and economics from the University of Virginia.
We project that reversing the IEEPA tariffs will generate up to $175 billion in refunds. Unless replaced by another source, future tariff revenue collections will fall by half.
We estimate that importers avoided 13.1 percent ($6.5 billion) of new tariffs by accelerating purchases and changing their purchasing patterns in response to the new tariff regime. Importers especially stockpiled pharmaceuticals and precious metals during 2025 Q1.
Many trade models fail to capture the full harm of tariffs. PWBM projects Trump’s tariffs (April 8, 2025) will reduce long-run GDP by about 6% and wages by 5%. A middle-income household faces a $22K lifetime loss. These losses are twice as large as a revenue-equivalent corporate tax increase from 21% to 36%, an otherwise highly distorting tax.
We analyze new data from the US Treasury to examine historical revenue effects of TCJA’s international corporate tax provisions. We also provide updated conventional estimates to assess the revenue impact of scheduled 2026 rate increases on foreign income of US corporations and assess several proposals that aim to further increase tax revenue.
We explain how the PWBM uses its dynamic Overlapping Generation (OLG) model to analyze tax policies affecting foreign-earned income by affiliates of U.S.-domiciled firms. We evaluate two illustrative policy changes: we show how firms’ tax liabilities and the allocation of capital between domestic and international production are affected by an increase in foreign tax rates and a decrease in U.S. tax exemptions on foreign-derived income.
After Ireland ended the Double Irish tax planning strategy in 2020, US firms with historical links to Ireland have shifted their intellectual property (IP) away from traditional tax havens to Ireland and the US to take advantage of tax incentives offered by both countries. This has coincided with a significant increase in Irish corporate tax revenue, particularly for less capital-intensive firms. Repatriation of foreign earnings to the United States has also increased, but fiscal benefits to the US have been offset by tax incentives passed under TCJA.
We examine recent trends in the activities of US multinationals and their foreign affiliates using data from the Bureau of Economic Analysis’s annual survey of US direct investment abroad. Since the passage of the Tax Cuts and Jobs Act (TCJA), multinational activity has become more domestically concentrated, continuing a trend that started before the legislation. This has coincided with a decline in the US effective corporate tax rate and relatively stable foreign effective tax rates.