James Fishback, a financial manager who had a brief collaboration with Vivek Ramaswamy during the inception of the Department of Government Efficiency (DOGE), reveals that the concept of “DOGE dividend” payments came to him in a vision.
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Fishback initially shared his thoughts on X in February: “American taxpayers deserve a ‘DOGE Dividend’: 20% of the savings from DOGE should be returned to hardworking Americans as a tax refund. This money was theirs to begin with!” Since then, both Elon Musk and former President Donald Trump have discussed it as a possibility.
Trump is familiar with economic stimulus payments, but this doesn’t mean the DOGE dividend would function the same way as his COVID-19 relief checks.
The tax rebate would be available only to American households that pay net-positive taxes.
Those with low to moderate incomes frequently receive more in tax credits than they contribute in taxes. According to the Tax Foundation, the bottom 50% of earners in the U.S. account for about 3% of the total individual income taxes collected by the IRS.
A study by the Pew Research Center discovered that taxpayers earning less than $40,000 generally receive more in tax credits than they owe in taxes. Consequently, these taxpayers would be ineligible for a DOGE dividend check.
Though the DOGE dividend would redistribute wealth, as a tax rebate, it would exclude lower-income individuals.
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One major contributor to the high inflation experienced in the U.S. after the pandemic was excessive stimulus and saturating the market with an abundance of cash. In a climate where inflation remains elevated, could further stimulation cause more harm?
Fishback contends that it wouldn’t. He argues that households that pay taxes are more inclined to save, invest, or reduce their debts with the money.
Not all financial analysts share this view. “I believe the inflationary effect would be considerable,” said budgeting and personal finance expert Aaron Razon from CouponSnake. “If a large sum is distributed among taxpayers, while a few might invest it, many are likely to increase their expenditures, consequently elevating demand, driving up prices, and potentially causing further distribution issues.”
Joseph Camberato, CEO at National Business Capital, concurs: “We witnessed the consequences of the government distributing stimulus checks during COVID. While the impact this time would be less significant given it’s a one-time payment instead of a continuous flow, it would still introduce additional cash into the economy, resulting in price increases.”
