Trump's 20% 'DOGE Dividend' Tax Refund Plan Might Cripple 'Entire Effort,' Says Tax Expert — Here's How Much Everyone Would Get - Tesla (NASDAQ:TSLA)

President Donald Trump proposed Wednesday to return 20% of savings from his administration’s Department of Government Efficiency (DOGE) initiatives to American citizens, while questions mount over Tesla Inc. CEO Elon Musk‘s influence in the program.

What Happened: Speaking at a Miami Beach event attended by Musk, Trump endorsed the concept of a “DOGE dividend” – a tax refund check funded by government cost-cutting measures, reported NBC News. “There’s even under consideration a new concept where we give 20% of the DOGE savings to American citizens, and 20% goes to paying down debt, because the numbers are incredible,” Trump said.

The proposal faces immediate criticism from tax policy experts. Erica York, Vice President of federal tax policy at the Tax Foundation, warned that spending the savings would “reduce the effectiveness of the entire effort.”

You can't pay down the debt when you're running huge deficits and increasing them with deficit-financed tax cuts—you're running up the debt! https://t.co/3PlXwFCMkQ
— Erica York (@ericadyork) February 19, 2025

Jessica Riedl, Senior Fellow at the Manhattan Institute, noted that with current budget deficits approaching $2 trillion, the estimated $4 billion in DOGE savings would amount to merely $2.42 per person if distributed.

A few minor concerns with rebating 20% of DOGE savings to taxpayers.
1) Current budget deficits of nearly $2 trillion.
2) Congress already drafting trillions more in tax cuts.
3) The (perhaps) $4 billion saved so far comes to $800 million rebated or $2.42 per person. pic.twitter.com/3dRJ66VbXX
— Jessica Riedl 🧀 🇺🇦 (@JessicaBRiedl) February 19, 2025

Why It Matters: Meanwhile, Musk’s role as a senior advisor to Trump has drawn legal challenges. The White House clarified Monday that while Musk isn’t officially part of DOGE, he serves as a presidential advisor – a position that’s now under scrutiny. Several Democratic states have filed a lawsuit alleging Musk wields “virtually unchecked power” as an unelected official.

Joshua Fisher, director of the White House Office of Administration, maintained that Musk has “no actual authority to make government decisions himself.”

DOGE’s claimed achievements have faced verification challenges. While its website reports $55 billion in savings from cuts to various agencies, recent discrepancies have emerged. A reported $8 billion savings from a Department of Homeland Security contract was later corrected to $8 million, according to NBC Report. Musk has already walked back his initial target of $2 trillion in savings.

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