Democrats’ Inflation Reduction Act would RAISE taxes on Americans making less than $400,000: GOP

Senate Democrats’ Inflation Reduction Act of 2022 would raise federal taxes for Americans in every income bracket, according to a study shared by Republicans on the Senate Finance Committee.

If the projection proves true, it would cast doubt on President Joe Biden’s promise not to raise taxes on Americans making less than $400,000 per year.

The study by the Joint Committee on Taxation found that taxpayers bringing in less than $200,000 per year would see their taxes raised by $16.7 billion over a decade.

But the study speculates about the effect of the package’s 15 percent minimum corporate tax rate, which it suggests could be passed off onto workers and shareholders.

It also factors in possible effects on the stock market that would affect company shareholders and people who rely on pensions and other similar funds.

Positive effects of green energy and healthcare tax credits, as well as lower prescription drug costs, were not factored into Republicans’ calculations.

The JCT states that the minimum corporate tax would bring in more than $300 billion over a decade.

While the bill is not directly hiking the tax rate for Americans making less than $400,000, the indirect increases that the JCT anticipates have been enough for Republicans to heap criticism on the White House.

Democrat Senator Joe Manchin, who tanked his party's previous attempt at passing a budget bill, helped negotiate this latest package

Senate Majority Leader Chuck Schumer is aiming to get it passed as soon as possible

The bill, named the Inflation Reduction Act of 2022, was negotiated behind closed doors by West Virginia Democrat Senator Joe Manchin (left) and Senate Majority Leader Chuck Schumer (right)

It could be President Joe Biden's last chance to score a victory without Republican support before the November midterm elections

It could be President Joe Biden’s last chance to score a victory without Republican support before the November midterm elections

GOP lawmakers also cited a budget model by the University of Pennsylvania’s Wharton business school that the legislation ‘would very slightly increase inflation until 2024 and decrease inflation thereafter.’

West Virginia Democratic Senator Joe Manchin, a key player in negotiating the bill, said he would ‘agree to disagree’ with the JCT’s predictions.

Manchin told reporters at the US Capitol on Monday that ‘there’s not one penny of change in taxes’ in the bill for Americans making less than $200,000.

‘We looked at taking everything out that could be looked at to fan the fires of inflation or inflame it. And there’s nothing there,’ he said.

The package is Democrats’ latest attempt to usher a significant budget bill through Congress without Republican support before the November midterm elections.

It provides more funding for the IRS, green energy subsidies, expansion of Affordable Care Act (ACA) subsidies, and lowers prescription drug costs among other measures.

The Penn Wharton Budget Model estimates that the $740 billion bill – which includes roughly $433 billion in new spending – would reduce the deficit by $248 billion.

Details on the Inflation Reduction Act of 2022

Senators Joe Manchin and Chuck Schumer’s new bill would raise $739 billion in new revenue through a variety of proposals:

$313 billion by implementing a 15-percent corporate minimum tax

$288 billion from empowering Medicare to negotiate lower drug prices

$124 billion from strong IRS enforcement of tax law

$14 billion from closing the carried interest loophole for money managers

It also includes $433 billion in new spending:

$369 billion on energy security and climate change

$64 billion to extend health care subsidies for the Affordable Care Act

All this would leave $300 billion to reduce the deficit

But a projection that includes making ACA subsidies permanent would shrink that deficit reduction to just $89 billion.

‘The more this bill is analyzed by impartial experts, the more we can see Democrats are trying to sell the American people a bill of goods,’ said Senator Mike Crapo, ranking member on the Senate Finance Committee.

‘Non-partisan analysts are confirming this bill raises taxes on the middle class and produces no meaningful deficit reduction when gimmicks are removed and the full cost is accounted for.

‘It’s no wonder this bill, which was drafted behind closed doors, is being rushed through the Senate at a record pace.’

In addition to raising taxes on Americans making less than $200,000, the JCT estimates that it would increase taxes on the $200,000 to $500,000 income bracket by $14.1 billion.

Americans making more than that would see a tax hike equivalent to $23.5 billion.

After 2031, Republicans claim Democrats’ green energy tax credits would force Americans bringing in less than $400,000 to ‘bear as much as two-thirds of the burden of the additional tax revenue collected that year.’

But the JCT study, which the GOP commissioned, omits the effects that healthcare and green energy credits as well as lower prescription drug costs have on everyday Americans.

The bill was negotiated behind closed doors by Manchin and Senate Majority Leader Chuck Schumer.

Manchin, who tanked multiple previous attempts by his party to pass a budget bill via reconciliation, appeared on all five major news networks’ Sunday shows to promote the legislation.

The reconciliation process would allow Democrats to pass the bill with just their razor-thin majority in the Senate plus Vice President Kamala Harris’ tie-breaking vote.

But that means every member must vote in lock-step for it to pass.

‘I agree with my Republican friends,’ Manchin told NBC’s Meet The Press on Sunday morning. ‘We should not increase taxes, and we did not increase taxes.’

He also denied that his support for the bill would undermine future efforts at bipartisanship.

‘You can walk and chew gum, you have a balanced approach. These are solutions Americans want. We were able to provide these solutions. Let’s not make them political,’ Manchin said.

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