Tax Policy Center Estimates Show Fewer Than 60 Percent of Working Households Would Benefit In Full From President’s Proposed Rebate
To Provide Effective Stimulus, Rebates Need to Reach Lower-Income Households
End Notes
[1] Another 26 million households without earnings would also be shut out of the rebate. Most of these households do not file income tax returns, making them difficult to reach through the tax system, but they are among the people hardest hit by a weakening economy and would quickly spend any funds they received. This group of very vulnerable households could best be reached through non-tax assistance, such as a temporary increase in food stamp benefits.
[2] While a few million of these households are upper-income households who do not receive the rebate (or receive less than the full amount) because they are on the Alternative Minimum Tax, the overwhelming majority are low- and moderate-income working families.
[3] This figure reflects the lowest income level at which a married couple with two children that qualify for the Child Tax Credit could possibly benefit from the rebate (or benefit from it in full). Families that claimed additional tax credits, like the dependent care tax credit, or that itemized deductions would need even higher incomes to qualify.
[4] Quoted in Sarah Lueck, John D. McKinnon, and Michael M. Phillips, “Bush, Democrats, Rush to Roll Out Stimulus Plan,” Wall Street Journal, January 18, 2008
[5] Congressional Budget Office, “Options for Responding to Short-Term Economic Weakness,” January 2008.
[6] See http://www.economy.com/home/article_ds.asp?cid=102598.