Who gets stimulated ?
January 27th, 2008 posted by 2CDC
January 25, 2008, 4:18 pm
Fast work by the people at the nonpartisan Tax Policy Center, who figure out who gets what from tax plans. They now have distribution tables for the stimulus proposal announced yesterday, and they more or less match my expectations.
Here’s what it looks like, by quintiles of the income distribution:
Distribution of rebates
I’d guess that the top two quintiles are unlikely to be liquidity-constrained, so the rebate will have little effect on their spending. But they get 58% of the money. The bottom two quintiles, which are the place you’d most expect to have an impact, get only 21% of the money. Split the difference on the middle quintile, and you’ve got a plan where around 2/3 of the outlay is likely to be ineffective.
Now. I’ve been in touch with some people on the Hill, who say that the glass is best viewed as 1/3 full rather than 2/3 empty — that it’s only thanks to the Democrats that people likely to spend their rebate are getting anything at all. And they have a point: this plan will produce some stimulus, while the Bush plan would have done virtually nothing.
And I suppose that it may be true that this was the best Nancy Pelosi could get. But I just can’t bring myself to celebrate.
This entry was posted on Sunday, January 27th, 2008 at 7:27 am
and is filed under Economy, Labor, Tax.
You can follow any responses to this entry through the RSS 2.0 feed.
Responses are currently closed, but you can trackback from your own site.
