It's hard to piece together exactly what the stimulus bill recently passed by the House stipulates in terms of tax cuts. But as the Wall Street Journal reports, it appears that the centerpiece is a temporary tax cut of $500 for working individuals ($1,000 for families) that phases out with income above $75,000 per worker. The tax cut won't be sent out in a lump-sum like the 2008 rebate; rather, federal withholdings from paychecks will fall, increasing periodic take-home pay by a smaller amount.
There are many other facets of the stimulus bill as well, as reported here and elsewhere.
Martin Feldstein has weighed in against the bill's current form given its high price tag, and among other things he cites the apparently dubious track record of temporary tax cuts toward spurring spending. I've seen all kinds of estimates of the spending-per-rebate-dollar associated with the 2008 cut, and Feldstein cites 15%.
The authors of the bill seem to be banking on the premise that a smaller but more sustained increase in income, however temporary, will result in more spending. This is clearly the behavioral economics perspective that has appeared in the New Yorker, which I wrote about recently.
