The ‘Inflation Reduction’ Act
The week of July 25th, U.S. Senate Democrats unveiled their latest iteration of a tax-and-spend proposal called the Inflation Reduction Act. Without debate or examination lasting even a couple of weeks, the Senate passed the legislation and sent it to the House on Sunday, August 7th. Passed along party-lines with Vice President Harris breaking the tie to make the final vote 51-50, yet another hundreds of billions was spent by Washington Democrats. Amazingly, the legislation includes new taxes, something even President Obama said he wouldn’t advise during a recession. Americans for Prosperity has cautioned against the title of the bill fooling Americans, as the legislation will do anything but reduce inflation. There’s a series of false claims being peddled by both President Biden and congressional Democrats.
First, President Biden claims the Inflation Reduction Act will not raise taxes on Americans making less than $400,000. The truth is that analysis by the non-partisan Joint Committee on Taxation (JCT) confirms the proposal would raise taxes on Americans making less than $400,000. In 2023 alone, the JCT analysis shows that taxpayers earning less than $200,000 would pay $16.7 billion more in taxes, and taxpayers earning less than $500,000 would see a $30.8 billion increase.
Second, Senator Manchin claims the Inflation Reduction Act closes loopholes and doesn’t raise taxes. The truth is that the corporate minimum tax included in the proposal will not close any “loopholes.” Congress should strive to avoid picking winners and losers through the tax code, yet the 15% minimum tax does not fix that problem. Instead it would complicate our tax code, raise taxes on businesses and taxpayers, and make it more difficult for businesses to invest. The 15% corporate minimum tax raises taxes by $313 billion alone and the proposal will raise $790 billion in new revenue.
What Senator Manchin and President Biden haven’t told Americans about the Inflation Reduction Act is that nearly 50% of the revenue generated from the 15% corporate minimum tax will be borne by manufacturers, according to the JCT. While Senator Manchin expressed concerns about “closing loopholes,” he was perfectly content to vote through billions of dollars in corporate subsidies in the CHIPS Act legislation and Inflation Reduction Act.
The entire push for this bill is misleading. The Inflation Reduction Act would not reduce inflation. According to the Penn Wharton Budget Model, “The impact on inflation is statistically indistinguishable from zero.” The Inflation Reduction Act is another Washington tax-and-spend scam. As AFP Vice President of Government Affairs Akash Chougule said, “[t]his latest proposal confirms that Washington continues to be in denial about the policies that got us to this point and explains why nearly 90 percent of Americans think we’re headed in the wrong direction.” Congress should reject proposals that raise taxes on Americans and fail to fight inflation. We urge you to visit www.action.americansforprosperity.org and sign the letter entitled “Stop the $739 Billion Reconciliation Bill!” When you sign, we can pull the total number of contacts into each office which then allows us to take immediate accountability measures. We appreciate your partnership in this pursuit. I’m Ashley Klingensmith, State Director with Americans for Prosperity-Pennsylvania. Find us on Facebook by searching @PAAFP and on Twitter by searching @AFPPennsylvania.
Ashley Sisca Klingensmith | State Director | Americans for Prosperity – PA
m: 412.915.1551 | e: [email protected] | @AFPPennsylvania