Fiscal stimulus bang for the buck: Output multiplier from various types of fiscal policy changes
| Tax cuts | Bang for the buck |
|---|---|
| Temporary tax cuts | |
| Nonrefundable lump-sum tax rebate | 1.01 |
| Refundable lump-sum tax rebate | 1.22 |
| Payroll tax holiday | 1.23 |
| Job tax credit | 1.29 |
| Across-the-board tax cut | 1.03 |
| Accelerated depreciation | 0.25 |
| Loss carryback | 0.24 |
| Housing tax credit | 0.88 |
| Permanent tax cuts | |
| Extended alternative minimum tax patch | 0.50 |
| Make Bush income tax cuts permanent | 0.35 |
| Make dividend and capital gains tax cuts permanent | 0.39 |
| Cut in corporate tax rate | 0.32 |
| Spending increases | |
| Extending unemployment insurance benefits | 1.60 |
| Temporary federal financing of work-share programs | 1.69 |
| Temporary increase in food stamps | 1.72 |
| General aid to state governments | 1.41 |
| Increased infrastructure spending | 1.57 |
| Low-income home energy assistance program | 1.14 |
Note: The “bang for the buck” is estimated by the one-year dollar change in gross domestic product (GDP) for a given dollar reduction in federal tax revenue or increase in spending. Multiplier indicates how much total output (GDP) changes in response to a $1 increase in deficit resulting from the fiscal policy change.
Source: Zandi 2010, Table 4