Elon Musk and President Donald Trump are reportedly considering a controversial new stimulus proposal that could send up to $5,000 to eligible American taxpayers.
The idea, known as the DOGE Dividend, would use funds saved through government layoffs and budget cuts made by the Department of Government Efficiency (DOGE), an initiative launched during Trump’s second term to reduce federal spending.
The proposal was first suggested by investment firm CEO James Fishback on X (formerly Twitter), a platform owned by Musk. Musk later presented the idea to Trump, who endorsed it publicly during the FII Priority Summit on February 19:
“There’s even under consideration a new concept where we give 20 percent of the DOGE savings to American citizens, and 20 percent goes to paying down debt, because the numbers are incredible, Elon.”
How Would the DOGE Dividend Work?
The idea is built on the expectation that the DOGE initiative will lead to $2 trillion in federal budget cuts. Under this proposal:
- 20% of the savings (approximately $400 billion) would be redistributed to American taxpayers.
- The rest would go toward paying off the national debt.
If divided among 79 million tax-paying households, each eligible taxpayer could receive a rebate check worth $5,000.
Who Would Get the $5,000 Check?
Unlike the COVID-19 stimulus checks distributed under Trump’s previous term, which were sent to most American households, the DOGE Dividend would only go to specific groups:
- Only tax-paying households would qualify—specifically those who pay more in federal income taxes than they receive in government benefits.
- Americans earning under $40,000 per year would not be eligible for the rebate since many in that income bracket pay little or no federal income tax.
According to data from the Pew Research Center, nearly half of Americans would be excluded from the rebate, including many low-income households that could arguably benefit the most amid rising inflation and soaring grocery prices.
Fishback defended the exclusion of lower-income Americans in his proposal:
“Tax-paying households are more likely to save (not spend) a transfer payment like the DOGE Dividend as consumption is a lower share of their income.”
Will the DOGE Dividend Actually Happen?
While the idea of a $5,000 stimulus check sounds appealing to eligible taxpayers, there are several uncertainties:
- So far, DOGE has only achieved about $55 billion in cuts—far below the $2 trillion goal initially projected.
- Even Musk has admitted that reaching the full $2 trillion savings is a “best-case outcome”, with a more realistic expectation of achieving half that amount.
- The proposal has yet to be officially approved by Congress, making its future highly uncertain.
Political and Economic Concerns
Critics have already raised concerns about the proposal, highlighting how it would exclude those most in need. By cutting off nearly half of all Americans—especially those earning under $40,000—the plan could widen economic inequality during a time when everyday living costs are already soaring.
Meanwhile, Musk’s close ties to Trump’s re-election campaign have also drawn attention. The tech billionaire reportedly donated $288 million to Trump’s campaign, raising questions about the influence of wealthy donors on policy proposals like the DOGE Dividend.
Musk himself has cautioned that Trump’s second term could bring “temporary economic hardship” for everyday Americans, particularly as federal spending cuts take full effect.
