President Donald Trump has proposed a plan to return 20% of savings from his administration’s Department of Government Efficiency (DOGE) initiatives to American citizens. However, tax policy experts have immediately criticized the proposal, warning of potential devastating consequences.
What’s Behind the Proposal
The concept of a “DOGE dividend” - a tax refund check funded by government cost-cutting measures - was endorsed by Trump at a Miami Beach event. The proposal suggests that 20% of the DOGE savings would be distributed to American citizens, with the remaining 20% going towards paying down debt. According to Trump, “the numbers are incredible,” but experts disagree.
Criticism from Tax Policy Experts
Erica York, Vice President of federal tax policy at the Tax Foundation, warned that spending the savings would “reduce the effectiveness of the entire effort.” York emphasized that the current huge deficits and increasing debt due to deficit-financed tax cuts would undermine any attempts to pay down the debt.
You can’t pay down the debt when you’re running huge deficits and increasing them with deficit-financed tax cuts - you’re running up the debt!
Jessica Riedl, Senior Fellow at the Manhattan Institute, noted that the estimated $4 billion in DOGE savings would amount to a mere $2.42 per person if distributed, given the current budget deficits approaching $2 trillion.
Concerns Over the Proposal
The proposal has raised several concerns, including:
- Current budget deficits of nearly $2 trillion
- Congress drafting trillions more in tax cuts
- The estimated $4 billion saved so far comes to $800 million rebated or $2.42 per person
Musk’s Influence and Legal Challenges
Elon Musk’s role as a senior advisor to Trump has drawn legal challenges, with several Democratic states filing a lawsuit alleging Musk wields “virtually unchecked power” as an unelected official. The White House has clarified that Musk serves as a presidential advisor, but has “no actual authority to make government decisions himself.”
Verification Challenges and Discrepancies
DOGE’s claimed achievements have faced verification challenges, with recent discrepancies emerging. A reported $8 billion savings from a Department of Homeland Security contract was later corrected to $8 million. Musk has already walked back his initial target of $2 trillion in savings.
Conclusion
The proposed 20% tax refund plan has been criticized by tax experts for its potential devastating consequences. With concerns over the proposal’s feasibility, Musk’s influence, and verification challenges, the plan’s future remains uncertain.