Trump’s senior adviser, Elon Musk, has pledged to discuss with the president a proposed taxpayer payout that would be financed by savings from their contentious streamlining initiative, the Department of Government Efficiency.
The CEO of hedge fund Azoria and a former employee of Greenlight Capital, James Fishback, estimates that this “DOGE dividend” may reach roughly $5,000 per tax-paying household.
In social media posts, Fishback demanded the reimbursement. On Tuesday, billionaire businessman Elon Musk responded, writing: “Will check with the President.”
Fishback has suggested taking 20% of the $2 trillion in savings over ten years that DOGE’s proponents had floated (though Musk has since retracted that goal) and giving it as a tax refund to about 79 million U.S. households that are anticipated to pay federal income taxes this year.
However, there are several obstacles in the way of achieving the reward.
First of all, the U.S. Senate and House of Representatives, which are both heavily dominated by Republicans, must go through a drawn-out and difficult procedure to fulfill the GOP’s pledge to prolong their party’s 2017 tax cuts before they expire at the end of this year.
It is anticipated that Congress will find a way to extend the cuts before January, but Trump’s campaign promises of additional tax breaks and the House’s fiscal conservatives will make the process more difficult. In addition to creating new tax deductions for significant infant expenses, home generators, and auto loan interest, these included eliminating taxes on tipped income, Social Security benefits, and overtime compensation.
From the October 2024 MarketWatch archives: Two infographics showing every tax break suggested by Kamala Harris and Donald Trump
One watchdog group, the Committee for a Responsible Federal Budget, estimates that Trump’s tax policies will cost between $5 trillion and $11 trillion over the course of ten years. According to a tracker from the Peter G. Peterson Foundation, the national debt had surpassed $36 trillion at that point.
Experts are questioning the DOGE dividend, which is similar to the COVID-19 stimulus payouts that were distributed during the first Trump administration and the Biden era, given the federal government’s financial situation.
“Love what DOGE is doing, but this is a bad idea,” wrote Preston Brashers, a tax policy research scholar at the conservative think tank Heritage Foundation, on social media. “‘Dividend checks’ are not required.’ Reducing spending has the benefit of controlling inflation. But inflation will return with a vengeance if the government issues stimmy cheques.
Similarly, “If the plan here is to take hypothetical savings over a 10-year period and cut checks for 20% of it up-front, that sounds both inflationary and likely pretty fiscally reckless,” stated Matt Glassman, a senior fellow at Georgetown University’s Government Affairs Institute.
In his plan, Fishback has resisted calls for inflation.
Fishback, who is well-known for his disagreements with his former employer, Greenlight Capital, about whether or not he had been “head of macro,” wrote, “Tax-paying households are more likely to save (not spend) a transfer payment like the DOGE Dividend as consumption is a lower share of their income.”
