Why Tax Rate Reductions Are More Stimulative Than Rebates: Lessons from 2001 and 2003
politics, government, socialism, capitalism, economics, economy, taxes
January 18, 2008, by Brian M. Riedl
With slower economic growth raising fears of a recession, Washington is abuzz with economic stimulus proposals centered on tax rebates. Tax rebates, however, don't stimulate the economy. Lawmakers currently examining economic stimulus proposals should reject rebates in favor of tax rate reductions.