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CHIPS is a Green Light for Schumer-Manchin Tax Hikes, Inflationary Spending, and Corporate Welfare

July 28, 2022

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Democrats have confirmed: CHIPS is a green light for higher taxes, worse inflation, and corporate welfare, just as President Biden’s cruel economy fell into a recession for the second quarter in a row. Democrats’ Inflation Reinforcement Act will only reinforce this inflationary death spiral.

Democrats’ Plan: CHIPS, then higher taxes and worse inflation

  • All along, Democrats’ plan was to use CHIPS to pave the way for tax increases.
  • If congressional Democrats succeed in providing $76 billion in corporate subsidies and carveouts to politically connected corporations, their next step will be tax increases, greater IRS audits, and inflationary spending that will hurt everyone else.
    • $76 billion in handouts/corporate welfare to large profitable chipmakers handpicked by Democrat leadership
    • $280 billion in total spending
  • Even before Democrats made their intentions clear, the Wall Street Journal noted that CHIPS “isn’t needed to compete with China, and it will set a precedent that other industries will follow. Anybody who can throw up a China competition angle will ask for money.”

Democrats fueled inflation that’s crushing families, and their “Inflation Reinforcement Act” will make it worse.

  • According to the San Francisco Federal Reserve, Democrats’ $2 trillion so-called “stimulus” triggered inflation. As a result, the typical family now has to spend nearly $6,000 more this year to buy the same goods and services they did a year ago.
  • Now they want to make it worse by proposing $800 billion in new spending in a “Inflation Reinforcement Act.”
    • Higher taxes, more spending: Democrats seek $740 billion in new revenue, including $480 billion in tax hikes.
    • Taxes that Hit the Middle Class and Send Jobs Overseas: Democrats’ seek $318 billion by imposing a Made-in-America tax – but with a carveout for politically favored companies. ​​The JCT found that 25 percent of the burden of Democrats’ tax hikes would be borne by workers in slashed wages.
    • Higher prices at the pump: With gas prices higher than they were a year ago thanks to President Biden’s war on American-made energy, now Democrats seek $38 billion in new taxes on American-produced oil and gas.
    • A supercharged IRS that will audit family-owned small businesses: Democrats want to hire 80,000 new IRS agents to audit individuals and small businesses. The IRS has already been found to target lower and middle income earners.
    • More corporate handouts: $64 billion in subsidies for insurance companies, $369 billion in Green New Deal spending, and $250 billion in Solyndra-style DOE loan programs.
    • Killing cures with Washington price controls: Democrats are reviving their socialist drug pricing scheme that will lead to a reduction of up to 342 cures according to a study by the University of Chicago.
    • Higher health insurance prices: Democrats want to put a downpayment towards spending $220 billion in Obamacare subsidies even as their current spending has already resulted in higher health care prices and 17 percent health insurance inflation.

Bottom Line: Biden’s cruel economy is now in a recession that’s crushing families, and their Inflation Reinforcement Act will slow economic growth further and push us into an inflationary death spiral.