James Fishback, an investment manager who briefly worked with Vivek Ramaswamy in the earliest days of the Department of Government Efficiency (DOGE), says the idea of “DOGE dividend” payments came to him in a dream.
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Fishback first tweeted about it on X in February: “American taxpayers deserve a ‘DOGE Dividend’: 20% of the money that DOGE saves should be sent back to hard-working Americans as a tax refund check. It was their money in the first place!” Since then, both Elon Musk and President Donald Trump have both aired it as a possibility.
Trump is certainly no stranger to economic stimulus payments. But that doesn’t mean the DOGE dividend would work just like his COVID-19 stimulus checks.
The tax rebate would only go out to American households who pay net-positive taxes.
Low- and moderate-income households often collect more in tax credits than they pay in taxes. The Tax Foundation points out that the bottom 50% of earners in the U.S. pay roughly 3% of the total individual income taxes collected by the IRS.
A analysis by the Pew Research Center found taxpayers earning below $40,000 generally collect more back in tax credits than they pay in taxes. So, these taxpayers would not be eligible for a DOGE dividend check.
While DOGE dividend is a redistribution of wealth, as a tax rebate it would exclude lower earners.
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One of the reasons the United States suffered high inflation in the wake of the pandemic was overstimulus and flooding the market with too much cash. At a time when inflation continues burning hot, would further stimulus throw more gasoline on the fire?
Fishback argues that it wouldn’t. He claims that taxpaying households are more likely to save and invest the money or pay down debts.
Not every financial expert agrees. “I believe the inflation impact would be significant,” said budgeting and personal finance expert Aaron Razon of CouponSnake. “If a large amount is distributed amongst taxpayers, a few will invest it, but many would instead increase their spending. That in turn raises demands, drives up prices, and potentially leads to more disruptions in distribution chains.”
Joseph Camberato, CEO at National Business Capital, agreed: “We all saw what happened when the government handed out stimulus checks during COVID. The impact would be smaller this time since it’s a one-time payout instead of an ongoing flow of money, but it would still add extra cash into the economy, which pushes prices up.”
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