Temporary Tax Rebates Do Not Stimulate Economic Growth
Curtis Dubay /
The Congressional Budget Office (CBO) recently released a paper: Did the 2008 Tax Rebates Stimulate Short-term Growth?
The paper is a comprehensive summary of the best recent literature on the topic. CBO sorts the literature into three categories:
- Studies that used detailed data about individual spending to study the effects of the temporary tax rebates;
- Studies that used survey data of what individuals did with the money when they received it; and
- Studies that used national data on income and spending to measure the effects of the tax rebates.