Many economists believe that tax cuts are not as effective as certain types of public spending in stimulating the economy, and we share that view. One thing that is even less effective as economic stimulus is tax cuts that are not received by the low-income people who are most likely to pump the money back into the economy by spending it immediately.
Unfortunately, it appears that millions of taxpayers who could most benefit from the stimulus have actually not received their checks. The deadline, October 15, is fast approaching for individuals to file their taxes so that they can receive their tax rebate checks. Here's a quick reminder of what's at stake: Taxpayers who filed their 2007 federal income taxes and had incomes of less than $75,000 ($150,000 for married couples) probably already received a rebate equal to income tax liability up to a maximum of $600 ($1,200 for married couples) or a minimum rebate of $300 ($600 for married couples). But those who did not file income taxes for 2007 are at risk of missing out if they still have not filed.
Last week the Center on Budget and Policy Priorities issued state fact sheets describing the number of rebates by city and county that are currently left unclaimed. Many of those folks who haven't claimed their rebate are those who could most utilize the checks -- low-income seniors and disabled veterans. Over 100,000 people in Michigan have yet to file and receive their checks. While there is some debate about whether or not the rebate checks have stimulated the economy, it's clear that no one benefits if the rebates go unclaimed by those who need them the most