Tax Cuts and Economic Stimulus: How Effective Are the Alternatives?
Several types of tax cuts have been debated for fiscal stimulus bills in recent years, and a fiscal stimulus was adopted in February, 2008 (P.L. 110-185) and a much larger one in February 2009 (P.L. 111-5). Both included individual tax cuts aimed at lower- and middle-income individuals, along with business tax cuts. In December 2010, along with an extension of expiring tax cuts, a temporary payroll tax cut was adopted. Many, but not all, tax cuts that were expiring after 2012 were extended permanently. Further stimulus might be considered in the 113th Congress, if employment rates remain high.
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