Table 1

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 GDP for a given dollar reduction in federal tax revenue or increase in spending. Multiplier indicates how much total output (gross domestic product) changes in response to a $1 increase in deficit resulting from the fiscal policy change.

Source: Zandi 2010, Table 4

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