TPC details who pays tariffs and what a $2,000 tariff dividend could do. A new Tax Policy Center analysis estimates that tariff policies in place as of December 4, 2025, will raise families’ federal tax burden by an average of $2,100 in 2026, increasing the average federal tax rate by 1.6 percentage points to 21 percent and cutting after-tax income by 2 percent. From 2026 through 2035, tariffs would raise about $2.3 trillion. President Trump’s proposed $2,000-per-person “tariff dividend” could cost up to three times that amount.
Corporate tax cuts deliver fast savings for big firms with big costs. The New York Times reports that companies such as Walmart, Amazon, Verizon, Eli Lilly, AT&T, and Meta are already reporting sharply lower tax payments after Congress restored and expanded full expensing for equipment and research in the 2025 reconciliation act. Corporate income tax receipts from July through November fell by about one-third (roughly $52 billion) from a year earlier, as firms accelerate deductions that previously had to be taken over several years. Economists note these “investment-friendly” provisions can boost capital spending and growth, but critics argue they are costly (about $650 billion over ten years), reward activity that would have occurred anyway, and let profitable firms defer taxes indefinitely, constrained only by the 15 percent corporate minimum tax created in 2022.
India and France revamp their tax treaty, trading dividend relief for capital-gains rights. Under a revised bilateral tax treaty described by Reuters, India and France have agreed to halve the dividend withholding rate to 5 percent for French parents holding more than 10 percent of an Indian company, while raising the rate to 15 percent for smaller portfolio holdings. In exchange, India will gain “full source-based” rights to tax French investors’ capital gains on Indian shares, and France will lose “most favored nation” status that had given it extra treaty advantages. The protocol, which still needs final approval in New Delhi, could save large French multinationals millions on dividends while increasing Indian tax on French portfolio investors, and it narrows India’s taxing scope on some technical service fees provided from France.
China to impose VAT on contraceptives as it tries to boost births. Beginning January 1, China will subject “contraceptive drugs and products” to the standard 13 percent value-added tax (VAT) under its new VAT law, ending a long-standing exemption, according to the Associated Press. The move fits Beijing’s shift from decades of strict birth limits toward policies aimed at raising fertility, but public reaction has been skeptical, with experts warning that higher prices could reduce access to condoms and other methods, leading to more unintended pregnancies and sexually transmitted infections.
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