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How the Inflation Reduction Act would raise taxes while failing to reduce inflation

Aug 1, 2022 by Gary Haglund

Last week Senate Democrats unveiled the latest iteration of their 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.

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 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) confirms the Inflation Reduction Act 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.

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 $313 billion alone.
  • The Inflation Reduction Act will raise $790 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.

Stop the Inflation Reduction Act today

Take action today to stop the Inflation Reduction Act.