Unemployment would be even lower than Congress is now estimating, with 1.6 million more Americans working, thanks to the increased productivity that rate cuts would unleash. That would go up, too. Because, as shown by the Kennedy tax cuts in the 1960s and the Reagan tax cuts in the 1980s, tax-rate cuts encourage people to produce more. Economic output goes up under rate cuts because there s more income available to spend, save and invest. That a rebate, no matter what its size, wouldn t do much to stimulate the economy shouldn t surprise anyone, because it s really the same as a government spending program.
Tax relief occurs when government doesn t take money from people in the first place.
A spending program occurs when the government collects money and then gives it to someone. Despite this, rebates may still strike some lawmakers as an attractive option, at least politically. Mark Wilson is a research fellow in Heritage s Roe Institute for Economic Policy Studies. The Heritage Foundation is committed to building an America where freedom, opportunity, prosperity and civil society flourish. The Heritage Foundation.