How the Inflation Reduction Act would raise taxes while failing to reduce inflation
Updated September 2, 2022
On August 16, 2022, President Joe Biden signed into law the latest iteration of Washington’s tax-and-spend proposal called the Inflation Reduction Act.
But don’t let the title fool you: the proposal would do anything but reduce inflation.
Here are three major things it doesn’t do:
❌Reduce inflation
❌Bring down gas prices
❌Cut harmful red tapeWorst of all, it doesn’t stop runaway federal spending. https://t.co/byEiWbCbFo
— Americans for Prosperity (@AFPhq) August 17, 2022
The Inflation Reduction Act would raise taxes and burden businesses and taxpayers while spending hundreds of billions of dollars on failed health care policies and clean energy handouts.
Below are a series of false claims being made about the Inflation Reduction Act.
President Biden claims the Inflation Reduction Act will not increase IRS audits or raise taxes on Americans making less than $400,000. The truth:
- Despite Biden’s promise, analysis by the non-partisan Joint Committee on Taxation (JCT) confirmed the Inflation Reduction Act will raise taxes on Americans making less than $400,000.
- President Biden and Congress have committed $80 billion of taxpayer money to the IRS, with $46 billion aimed at increasing enforcement.
- Treasury Secretary Yellen’s letter to the IRS requesting that new IRS funds “shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels” does not mean fewer audits for these earners.
- Senate Democrats voted “no” on an amendment offered by Senator Crapo to prohibit the IRS from using new funds to audit families and businesses earning less than $400,000.
Senator Manchin claims the Inflation Reduction Act closes loopholes and doesn’t raise taxes. The truth:
- 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 $222 billion alone.
- The Inflation Reduction Act will raise more $700 billion in new revenue.
What Senator Manchin and President Biden are NOT telling you about the Inflation Reduction Act:
- Nearly 50% of the revenue generated from the 15% corporate minimum tax will be borne by manufacturers, according to the JCT.
- While Senator Manchin expresses concerns about “closing loopholes,” he’s 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. Congress should reject proposals that raise taxes on Americans and fail to fight inflation.
Take action today to hold Congress accountable for passing the Inflation Reduction Act.
