“Stimulus checks” and “DOGE dividends” are terms that have been bandied about on social media and discussion forums in recent weeks, but perhaps less research has been conducted on the subject than we Americans would prefer.
We already know about stimulus checks, which are non-refundable payments that helped stimulate the economy and were critical for millions of Americans during the coronavirus pandemic.
However, the new DOGE dividends, which are widely discussed these days, are a proposal made to the Department of Government Efficiency (DOGE), which was established on January 20, 2025 under Donald Trump’s second administration, led by Elon Musk and Vivek Ramaswamy. James Fishback, CEO of an investment firm, proposed returning 20% of savings to American taxpayers through $5,000 checks per household.
79 million households would be eligible to receive DOGE dividends
It is estimated that DOGE could save $2 billion in 18 months if its cuts continue to yield the results that Musk and Trump are achieving. Of this amount, 20%, or $400 billion, would be distributed to 79 million tax-paying households, averaging $5,000 per household.
Trump has expressed support for returning 20% of savings to citizens in speeches, and Musk has responded positively in public interactions. However, Americans have received little additional information.
Eligibility criteria: Who could receive these stimulus checks?
A key aspect is that the checks would only be issued to households that are considered “net payers” of federal income taxes, which means they pay more in taxes than they receive in federal benefits.
This excludes the vast majority of low-income Americans, particularly those earning less than $40,000 per year, who typically pay no federal income taxes after deductions and credits.
For example, households in the bottom 40% of income typically have a negative effective tax rate (-10.3%), implying that they receive more in refundable credits than they pay.
In contrast, households in the top 60%, with incomes typically exceeding $47,000, are the most likely to qualify. Fishback contends that this restriction reduces the risk of inflation because low-income households tend to spend more.
The DOGE Dividends could actually be smaller
As previously stated, this potential stimulus payment program could be compared to checks issued during Donald Trump’s first administration and a portion of Joe Biden’s government during the coronavirus pandemic.
Others have drawn parallels with Alaska’s Permanent Fund Dividend program, which distributes oil profits to the state’s permanent residents.
Now, if Musk’s DOGE savings are as expected, the check should be around $5,000 per family; however, if they are lower, some calculations suggest that only about $1,250 or $2,500 could be distributed per eligible family.
Senator Josh Hawley supports the concept but prefers to direct savings to the Child Tax Credit, while Senator Ted Cruz wants more information. House Speaker Mike Johnson expressed skepticism, citing concerns about fiscal responsibility.
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