Well sort of. They didn’t call them that, but reducing “payroll taxes” is equivalent to subsidising wages.
We have discussed this concept before, and decided that in a specific situation it could make some sense as a temporary measure.
Note that this relies on stick wages: Otherwise the result of a payroll tax cut and a personal tax cut would be the same. As a result, they must have slid sticky wages in there, while keeping goods prices flexible. Would definitely be interested in more details.
I would also note that the report assumes that the tax cut is a straight transfer. However, by lowering marginal tax rates (especially on high productivity stuff) it should help boost the supply side of the economy. Furthermore, they assume that taxes will increase in the future – not that real spending will fall.
They are right that there is no free lunch from a stimulus program. But the size of the trade-off depends strongly on the assumptions. The assumption that the tax cut is a flat transfer and is only temporary isn’t exactly going to give a very favourable view of this trade-off 😉