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Did the 2001 Tax Rebate Stimulate Spending? Evidence from Taxpayer Surveys

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  • Matthew D. Shapiro
  • Joel Slemrod

Abstract

In 2001, many households received rebate checks as advanced payments of the benefit of the new, 10 percent federal income tax bracket. A survey conducted at the time the rebates were mailed finds that few households said that the rebate led them mostly to increase spending. A follow-up survey in 2002, as well as a similar survey conducted after the attacks of 9/11, also indicates low spending rates. This paper investigates the robustness of these survey responses and assesses whether such surveys are useful for policy evaluation. It also draws lessons from the surveys for macroeconomic analysis of the tax rebate.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9308.

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Date of creation: Nov 2002
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Publication status: published as Did the 2001 Tax Rebate Stimulate Spending? Evidence from Taxpayer Surveys , Matthew D. Shapiro, Joel Slemrod. in Tax Policy and the Economy, Volume 17 , Poterba. 2003
Handle: RePEc:nbr:nberwo:9308

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  1. Matthew D. Shapiro & Joel Slemrod, 2001. "Consumer Response to Tax Rebates," NBER Working Papers 8672, National Bureau of Economic Research, Inc.
  2. William G. Gale & John Sabelhaus, 1999. "Perspectives on the Household Saving Rate," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 181-224.
  3. Parcell, Ann D., 1999. "Challenges and Uncertainties in Forecasting Federal Individual Income Tax Receipts," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 325-38, September.
  4. Shapiro, Matthew D & Slemrod, Joel, 1995. "Consumer Response to the Timing of Income: Evidence from a Change in Tax Withholding," American Economic Review, American Economic Association, vol. 85(1), pages 274-83, March.
  5. Alan S. Blinder, 1981. "Temporary Income Taxes and Consumer Spending," NBER Working Papers 0283, National Bureau of Economic Research, Inc.
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Cited by:
  1. Georg Fahrenschon & Clemens Fuest & Ralph Brügelmann & Willi Diez, 2009. "Konsumgutscheine, Steuer- und Zinssenkungen, Hilfspaket für die Automobilbranche: Sind das geeignete Mittel gegen die Rezession?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 62(01), pages 03-15, 01.
  2. Kenneth Lewis & Laurence Seidman, 2006. "Overcoming the Zero Interest-Rate Bound: A Quantitative Prescription," Working Papers 06-14, University of Delaware, Department of Economics.
  3. Échevin, Damien, 2009. "Ricardian or Spender Consumers? Evidence from a Taxpayer Survey Questionnaire," MPRA Paper 19496, University Library of Munich, Germany.
  4. Michael Kumhof & Douglas Laxton, 2009. "Simple, Implementable Fiscal Policy Rules," IMF Working Papers 09/76, International Monetary Fund.
  5. Reuven Avi-Yonah, . "The Pitfalls of International Integration: A Comment on the Bush Proposal and Its Aftermath," University of Michigan John M. Olin Center for Law & Economics Working Paper Series umichlwps-1007, University of Michigan John M. Olin Center for Law & Economics.
  6. Thomas Bishop & Cheolbeom Park, 2010. "Borrowing Constraints, the Marginal Propensity to Consume, and the Effectiveness of Fiscal Policy," Discussion Paper Series 1008, Institute of Economic Research, Korea University.
  7. Christoph A. Schaltegger & Martin Weder, 2009. "Fiskalpolitik als antizyklisches Instrument? Eine Betrachtung der Schweiz," CREMA Working Paper Series 2009-24, Center for Research in Economics, Management and the Arts (CREMA).
  8. Chambers, Valrie & Spencer, Marilyn, 2008. "Does changing the timing of a yearly individual tax refund change the amount spent vs. saved?," Journal of Economic Psychology, Elsevier, vol. 29(6), pages 856-862, December.
  9. Sumit Agarwal & Dan Aaronson & Eric French, 2008. "The Consumption Response to Minimum Wage Hikes," 2008 Meeting Papers 379, Society for Economic Dynamics.
  10. Sumit Agarwal & Leslie McGranahan, 2012. "Spending responses to state sales tax holidays," Working Paper Series WP-2012-10, Federal Reserve Bank of Chicago.
  11. Norbert Michel & Nazneen Ahmad, 2012. "Consumer response to child tax credit," Empirical Economics, Springer, vol. 43(3), pages 1199-1214, December.

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