{
  "id": "RS21126",
  "type": "CRS Report",
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      "date": "2020-05-14",
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      "title": "Tax Cuts and Economic Stimulus: How Effective Are the Alternatives?",
      "summary": "The economic effects of the Coronavirus Disease 2019 (COVID-19) pandemic has led Congress to enact general fiscal stimulus in the form of tax cuts and spending increases. Further stimulus may be considered. This report discusses tax cuts enacted during the Great Recession, as well as those recently enacted and those under consideration. \nIn response to the Great Recession several types of tax cuts were debated as possible fiscal stimulus\u2014with fiscal stimulus legislation enacted in February 2008 (P.L. 110-185) and a much larger one in February 2009 (P.L. 111-5). Both bills included individual tax cuts aimed at lower- and middle-income individuals, along with business tax cuts. In December 2010, along with an extension of expiring tax cuts, a temporary payroll tax cut was adopted. Many, but not all, tax cuts that were expiring after 2012 were extended permanently.\nA tax cut for stimulus is more effective the greater the fraction of it that is spent. Empirical evidence suggests individual tax cuts will be more likely to be spent if they go to lower-income individuals, making the tax rebate for lower-income individuals likely more effective than several other tax cuts. There is some weak evidence that tax cuts received in a lump sum will have a smaller stimulative effect than those reflected in paychecks, but this evidence is uncertain. However, studies of the 2001 rebate found that a significant amount of that rebate was spent. While temporary individual tax cuts likely have smaller effects than permanent ones, temporary cuts contingent on spending (such as temporary investment subsidies or a sales tax holiday) are likely more effective than permanent cuts. (Sales tax holidays may, however, be very difficult to implement.) The effect of business tax cuts is uncertain, but likely small for tax cuts whose main effects are through cash flow. Multiplier estimates reflect these considerations.\nMultiplier estimates from fiscal stimulus enacted during the Great Recession suggest that the most effective tax stimulus provisions in the recent legislation addressing the COVID-19 pandemic were likely the individual rebates, with business provisions having smaller effects. The Paycheck Protection Program and spending and transfer programs were also likely to have larger effects, although some of these demand-side stimulus programs that transferred incomes to individuals may be less effective due to the unique nature of the supply constraints in the current environment. Even if they do not stimulate spending, these measures could also be viewed as relief measures that may help individuals and businesses deal with debt and be more able to comply with social distancing measures designed to prevent the spread of the coronavirus.",
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      "id": 620264,
      "date": "2020-03-18",
      "retrieved": "2020-03-19T22:15:25.153534",
      "title": "Tax Cuts and Economic Stimulus: How Effective Are the Alternatives?",
      "summary": "The economic effects of the COVID-19 pandemic may lead Congress to consider a general fiscal stimulus in the form of tax cuts. This report discusses tax cuts enacted during the previous recessions and their potential effectiveness.\nIn response to the Great Recession several types of tax cuts were debated as possible fiscal stimulus bills\u2014with fiscal stimulus legislation enacted in February, 2008 (P.L. 110-185) and a much larger one in February 2009 (P.L. 111-5). Both bills included individual tax cuts aimed at lower- and middle-income individuals, along with business tax cuts. In December 2010, along with an extension of expiring tax cuts, a temporary payroll tax cut was adopted. Many, but not all, tax cuts that were expiring after 2012 were extended permanently.\nA tax cut is more effective the greater the fraction of it that is spent. Empirical evidence suggests individual tax cuts will be more likely to be spent if they go to lower-income individuals, making the tax rebate for lower-income individuals likely more effective than several other tax cuts. There is some weak evidence that tax cuts received in a lump sum will have a smaller stimulative effect than those reflected in paychecks, but this evidence is uncertain. However, studies of the 2001 rebate found that a significant amount of that rebate was spent. While temporary individual tax cuts likely have smaller effects than permanent ones, temporary cuts contingent on spending (such as temporary investment subsidies or a sales tax holiday) are likely more effective than permanent cuts. (Sales tax holidays may, however, be very difficult to implement.) The effect of business tax cuts is uncertain, but likely small for tax cuts whose main effects are through cash flow.",
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    {
      "source": "EveryCRSReport.com",
      "id": 416797,
      "date": "2013-01-18",
      "retrieved": "2016-04-06T23:39:37.187340",
      "title": "Tax Cuts and Economic Stimulus: How Effective Are the Alternatives?",
      "summary": "Several types of tax cuts have been debated for fiscal stimulus bills in recent years, and a fiscal stimulus was adopted in February, 2008 (P.L. 110-185) and a much larger one in February 2009 (P.L. 111-5). Both included individual tax cuts aimed at lower- and middle-income individuals, along with business tax cuts. In December 2010, along with an extension of expiring tax cuts, a temporary payroll tax cut was adopted. Many, but not all, tax cuts that were expiring after 2012 were extended permanently. Further stimulus might be considered in the 113th Congress, if employment rates remain high.\nA tax cut is more effective the greater the fraction of it that is spent. Empirical evidence suggests individual tax cuts will be more likely to be spent if they go to lower income individuals, making the tax rebate for lower income individuals likely more effective than several other tax cuts. There is some weak evidence that tax cuts received in a lump sum will have a smaller stimulative effect than those reflected in paychecks, but this evidence is uncertain. However, studies of the 2001 rebate found that a significant amount of that rebate was spent. While temporary individual tax cuts likely have smaller effects than permanent ones, temporary cuts contingent on spending (such as temporary investment subsidies or a sales tax holiday) are likely more effective than permanent cuts. (Sales tax holidays may, however, be very difficult to implement.) The effect of business tax cuts is uncertain, but likely small for tax cuts whose main effects are through cash flow. This report will be updated as events warrant.",
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc813090/",
      "id": "RS21126_2008Dec05",
      "date": "2008-12-05",
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      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc809326/",
      "id": "RS21126_2007Jan23",
      "date": "2007-01-23",
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      "id": "RS21126 2003-01-30",
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