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CBPP Statement: Robert Greenstein, Executive Director, on the President's Economic Stimulus Plan

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Publication Date: January 2008

Publisher(s): Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Robert Greenstein

Special Collection: John D. and Catherine T. MacArthur Foundation

Topic: Banking and finance (Taxation and tax policy)
Economics (Economic policy, planning, and development)

Keywords: Tax code; Economic projections; Income diversity; Economic inequality

Type: Report

Abstract:

The centerpiece of the President’s new stimulus plan — a rebate provided by temporarily eliminating the 10 percent income tax bracket — fails crucial tests for providing the most effective stimulus, because it is not targeted on the tens of millions of families most likely to spend that rebate.  In so doing, the plan flouts the advice offered last week by Federal Reserve chair Ben Bernanke.  The plan also includes a business tax component that, at best, would provide modest stimulus.