What Was the Bush Economic Stimulus Package?:
The $168 billion Bush Economic Stimulus Package was approved by Congress in 2008. The package eliminated taxes on the first $6,000 of taxable income for individuals and the first $12,000 of income for couples. The economic stimulus package was paid as a rebate check mailed out to taxpayers, in amounts as follows:
- Individuals up to $600.
- Married couples up to $1,200.
- Those with children $300 per dependent child.
The rebate amounts will be reduced for individuals with incomes over $75,000 and couples with incomes over $150,000.
The Bush Economic Stimulus Package gave 20 million retirees on Social Security and disabled veterans a check for $300 ($600 for couples) if they earned at least $3,000 in 2007 in benefits. However, those on SSI alone did not receive checks. (See SSI and the Tax Rebate Checks)
What Were the Pros of the Bush Economic Stimulus Package?:
The Bush Economic Stimulus Package was about 1% of GDP
, which advocates said was large enough to impact the $14 trillion economy. Most economists agreed that tax rebates would immediately lift consumer spending, especially if aimed at low-income families who were more likely to spend it than save it. For example, the 2001 rebate checks increased total consumption by 0.8% in the quarter that the checks were received and 0.6% in the subsequent quarter.
The business tax relief gave companies an incentive to expand that year, thereby creating new jobs.
What Are the Cons of the Bush Economic Stimulus Package?:
By the time the checks arrived in taxpayers' hands, it was be late summer, too late to impact the first half of the year.
Tax rebates may not be the most efficient way to stimulate the economy. The biggest impact is made by increases in unemployment benefits, which produced about $1.73 in demand for every dollar spent, according to the Economy.com study.