I've been hearing a lot about a potential tax rebate that would act as an economic stimulus meant to keep us out of a recession (or keep a recession shallow). Many critics have opined that such a measure won't necessarily affect consumer spending. After all, if people get a check from the government in the mail, won't they be likely to put it into savings or pay off debt? It would almost certainly be in the best interest of poorer individuals to do so. Perhaps the stimulus should be narrowly focused on the middle class and upper class instead.
I don't know if anyone else has suggested this, but why doesn't the government allow a temporary write-off for consumer purchases? In other words, spend your disposable income instead of saving it (and save your receipts), and the government will allow you to deduct that amount from your taxable income. Obviously caps would need to be put in place to prevent abuse, but I think the idea is economically sound (if not easy to accomplish procedurally). Another way way to achieve a similar effect would be to enact some sort of negative sales tax, whereby the government springs for a small percentage of your consumer purchases. At the very least these measures would be targeted to the actual purpose of the stimulus, as opposed to a broadly applied transfer payment.