Elon Musk and his DOGE team have been making headlines for their efforts to cut government waste. Over the past few months, they have reportedly identified around $140 billion in potential expense cuts. This achievement has sparked discussions about how to use these savings, particularly a proposal from the Trump administration to give $5,000 tax rebates to certain taxpayers.
Critics argue that handing out rebates to those who already pay little in federal income taxes is not a good idea. They believe that the savings should instead go towards reducing the national deficit and limiting the size of the federal government. The concern is that providing rebates could lead to unfair wealth redistribution, which goes against conservative tax principles.
In 2022, the top 1% of earners in the U.S. paid a significant portion of federal income taxes, while many lower-income taxpayers paid very little. For instance, the bottom 50% of earners contributed only about $822 in federal taxes, with an effective tax rate of just 3.7%. If $5,000 rebates were given to all taxpayers, it would disproportionately benefit those who already pay less, amplifying the existing progressivity of the tax system.
The author of a recent article argues that any savings from DOGE’s work should be used to tackle the national debt rather than funding a rebate program. They point out that the idea of distributing $400 billion in rebates is premature, given that the current savings are only $135 billion. Additionally, implementing such a rebate program could face administrative challenges and accusations of corruption.
The author believes that the focus should remain on exposing and eliminating wasteful government spending rather than distributing one-time rebates. They hope that DOGE will continue to uncover significant savings, which could have a lasting positive impact on government efficiency.