Americans who earn less than $40,000 per year are unlikely to get their hands on the proposed “DOGE dividend” payments.
Why It Matters
The Department of Government Efficiency (DOGE) has been tasked with streamlining federal government operations and reducing costs. One of the recent ideas for use of the savings is to send lump sum payments to taxpaying households across the U.S., though this is yet to be confirmed.
What Is A ‘DOGE Dividend’?
James Fishback, CEO of the Azoria investment firm, has proposed sending checks of $5,000 directly to American taxpayers. The idea has been noted by President Donald Trump and DOGE head Elon Musk.
In a four-page proposal posted on X, formerly Twitter, Fishback said sending checks of $5,000 directly to American taxpayers would “restore public trust between taxpayers and their government, making good on this social contract and increasing tax morale.”
“Long term, DOGE dividends will drive even more savings and efficiency, which unburdens the economy and empowers Americans who have been held back for too long by D.C. bureaucrats who want to micromanage their lives, families and businesses,” Fishback told Newsweek.
He estimated the cost would be some $400 billion, and that checks would be sent to taxpaying households across the U.S.—but only those who are net contributors to the tax system.
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Who Will Get Them?
It’s important to note that the idea has not officially become government policy, although Trump has said he is interested in the idea.
Fishback said the payments will only go to “households that are net-payers of federal income tax,” which means people who pay more in taxes than they get back—at least through direct income taxes, not other indirect methods like sales tax. According to the Pew Research Center, most Americans who have an adjusted gross income of less than $40,000 per year effectively pay no federal income tax.
Fishback said sending checks only to those that are net contributors would stop worries about rising inflation. Concerns have been voiced about the inflationary impact of sending thousands of dollars directly to Americans, given that stimulus checks sent out during the COVID-19 pandemic were found to have “contributed to an increase in inflation of about 2.5 percentage points,” according to a 2022 report by the Federal Reserve Board.
“A lot of low-income households essentially saw transfer payments of 25 to 30 percent of their annual…income,” Fishback said, according to a report by NBC. He added that the DOGE payments should go “exclusively” to net tax payers as “they have a lower propensity to spend and a higher propensity to save a transfer payment like the DOGE dividend.”
Essentially, this means that those who earn the least—and therefore arguably need the money the most—will not benefit from any proposed payment.
What People Are Saying
James Fishback, CEO of the Azoria investment firm, in his proposal: “When a breach of this magnitude happens in the private sector, the counterparty, at minimum, refunds the customer since they failed to deliver what was promised. It’s high time for the federal government to do the same, and refund money back to taxpayers given what DOGE has uncovered.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Even with the potential savings of recent cuts, stimulus checks are an incredibly expensive endeavor for a government already deeply in debt and facing no pandemic-level emergency to undertake. I would expect legislators will hold out hope of new proposals like tax cuts and less restrictions on some government benefit programs as a way to steer eyes away from stimulus checks being the sole way to help Americans.”
Lance Roberts, chief investment strategist and economist at RIA Advisors, told Newsweek: “…According to U.S. Debt Clock, DOGE has only saved about $50 billion so far, which is roughly $312.50 per the roughly 160 million U.S. taxpayers. If they send out $5,000 checks that is an expenditure of $800 billion, which is far in excess of what savings have been accomplished, which would certainly increase the deficit leading to higher interest rates, causing pain to the average consumer trying buy a car or get a mortgage.”
Joseph Camberato, CEO of National Business Capital, told Newsweek: “I understand where the idea’s coming from, but handing out $5,000 checks isn’t the best move. Just because we saved a bunch of money doesn’t mean we should start giving it away. It’s like that old saying: You can give a man a fish, or you can teach him to fish. If we’re smart, we’ll invest that money in things that create long-term value, like innovation, infrastructure and businesses, that build wealth across all levels.”
What Happens Next
The prospect of DOGE dividends is not set in stone. Notable Republicans like House Speaker Mike Johnson have indicated concerns, saying the money would be better spent paying down the national deficit.
