Today, the Supreme Court heard oral arguments over whether the Trump Administration’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA) will be allowed to stand.
“Today’s arguments clearly showed the need for the Supreme Court to overturn the IEEPA tariffs,” Free Trade Initiative Director Bryan Riley said.
Here are three key takeaways for taxpayers from today’s arguments.
Tariffs are taxes. Attorney Neil Katyal, representing businesses that oppose the tariffs, opened his argument by stating:
“May it please the court, tariffs are taxes. They take dollars from Americans’ pockets and deposit them in the U.S. Treasury. Our founders gave that taxing power to Congress. Yet here, the president bypassed Congress and imposed one of the largest tax increases in our lifetimes.”
Representing the government, Solicitor General D. John Sauer repeatedly argued that this is a regulatory tariff, not a tax.
If the Court accepts the government’s position and upholds the tariffs, taxpayers will face an estimated $25,000 per household on average in tariff costs from 2025 to 2035, according to Congressional Budget Office data. According to the Yale Budget Lab, U.S. tariffs have reached 17.9%, the highest level since 1934. Rolling back IEEPA tariffs would not eliminate that tariff burden, but it would be a step in the right direction.
- Failure to overturn IEEPA tariffs will provide presidents from both parties with unchecked power to impose additional taxes in the future. This was made clear when Justice Neil Gorsuch asked whether the President could impose a 50% tariff on gas powered cars and auto parts to deal with an unusual and extraordinary threat from climate change. Solicitor General Sauer replied, “It's very likely that could be done.”
If the Supreme Court allows IEEPA tariffs to stand, Congress will never reclaim its constitutional authority over duties and the regulation of international commerce. Several Justices pointed out that, in the absence of Supreme Court action, the only way for Congress to reclaim its taxing authority would be to pass legislation that would be vetoed by the President and require a supermajority to overturn. Justice Gorsuch explained, “So Congress as a practical matter can't get this power back once it's handed it over to the president . . . it’s a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people's elected representatives.”
Therefore, the only practical hope for taxpayers is for the Supreme Court to act.
National Taxpayers Union urges a quick and decisive ruling from the Court.