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

Author

Listed:
  • 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.

Suggested Citation

  • Matthew D. Shapiro & Joel Slemrod, 2002. "Did the 2001 Tax Rebate Stimulate Spending? Evidence from Taxpayer Surveys," NBER Working Papers 9308, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9308
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    References listed on IDEAS

    as
    1. Melvin Stephens Jr., 2003. ""3rd of tha Month": Do Social Security Recipients Smooth Consumption Between Checks?," American Economic Review, American Economic Association, vol. 93(1), pages 406-422, March.
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    5. Parcell, Ann D., 1999. "Challenges and Uncertainties in Forecasting Federal Individual Income Tax Receipts," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(3), pages 325-338, September.
    6. Matthew D. Shapiro & Joel Slemrod, 2003. "Consumer Response to Tax Rebates," American Economic Review, American Economic Association, vol. 93(1), pages 381-396, March.
    7. 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.
    8. Franco Modigliani & Charles Steindel, 1977. "Is a Tax Rebate an Effective Tool for Stabilization Policy?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 8(1), pages 175-210.
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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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