The expectation that higher government spending today may lead to higher taxation in the future would induce both households and firms to save rather spend any additional income, thus reducing the size of the fiscal multiplier. Therefore, the public perception of overall fiscal sustainability plays an important role in the impact of the respective national fiscal stimuli.
6  BIS Review 72/2009  The effectiveness of fiscal stimulus measures also depends on the extent to which private investors respond positively to tax policy, with their investments likely to be more responsive in the case of “temporary” tax breaks, as they provide an incentive to bring forward future investment plans.