Defying the skeptics (including me), the Internal Revenue Service last week began depositing direct payments of $1,200 for adults (plus $500 per child under age 17) in the bank accounts of eligible taxpayers (though not without glitches).
And yet, one mystery still surrounds those payments. What to call them?
- According to the Coronavirus Aid, Relief, and Economic Stimulus (CARES) Act, the payments are “recovery rebates.”
- The media and the large tax preparation companies call them various names, including “stimulus checks,” “stimulus payments,” or “coronavirus stimulus.”
- The IRS calls them “economic impact” payments.
- The payments will show up in bank statements as “IRS Treas 310.”
And Lester Holt, my favorite network news anchor, recently asked viewers “Have you received your relief check yet?”
Here at TaxVox, we say “coronavirus recovery rebates.” (Sometimes we substitute “COVID-19” for “coronavirus.”)
Do names matter? Or was Juliet right? “A rose by any other name would still smell as sweet.”
But we all know that branding matters. Or at least that is what I learned from years of watching The Apprentice, where branding was given as much (maybe more) weight as a product’s usefulness.
And product names may be the most important type of branding. We will never again see a car named Edsel or Pinto. Or a beverage called New Coke. When googling for information on the $1,200 payment, wouldn’t people be more successful if it was always called by the same name?
But even the IRS’s website is inconsistent. On April 2, the IRS warned taxpayers about scammers who would try to steal their $1,200 payment. One way to detect a scam? Scammers will emphasize the words “Stimulus Check” or “Stimulus Payment.”
Yet, in subsequent releases posted on its website, the IRS seems to have raised the rhetorical white flag. The website section devoted to Economic Impact Payments says, “The payments, also referred to by some as stimulus payments, are automatic for most taxpayers.” Yet the IRS has not revised its April 2nd warning about scammers.
To me, the various names suggest different perspectives on those payments and, as such, have distinct implications for who should benefit.
For example, economic stimulus payments should go to people who will spend the money quickly and thus help energize the economy.
Economic impact payments should go to those most adversely affected by the pandemic—because either they or their loved ones have been stricken with the coronavirus or because they lost their jobs due to business closures. But that characterization would imply that the amount of the payment should be adjusted to reflect the severity of the pandemic’s impact on the recipient.
OK, I know—I am overthinking it. “Recovery rebates” and “economic stimulus payments” are largely just holdovers from 2008, when taxpayers received the first wave of assistance in the wake of the Great Recession. And the range of names used in the media partly reflects editors’ differing views on what term drives the greatest traffic to their websites or the rules in some ancient stylebook.
Personally, though, I am stuck. I used to work at the Congressional Budget Office (CBO), and I have collaborated with economists at the Joint Committee on Taxation (JCT). At both organizations, the practice is to use statutory names. Look at JCT’s revenue estimates of the CARES Act or CBO’s report on the budgetary impact of the legislation: Both call the payments “recovery rebates.” It is a challenge for me to break habits and not use the statutory name.
But even though it has no basis in either current or past legislation, I actually like the IRS’s choice best. The name—economic impact payment—represents a brand that is consistent with my view of the payment’s mission.
Why am I obsessing about this? Money by any other name would still smell as sweet.
Yet maybe branding matters more than usefulness. Why else would Treasury add President Trump’s name to the, um, economic impact checks, even at the potential cost of delaying those payments?
For the record, we at TaxVox will continue to call the payments by their statutory name—with the added descriptor of “coronavirus” or “COVID-19” to help with the search engine results (though we have different opinions about which phrase would get the most attention).
