With Vice President Kamala Harris promising to impose the largest tax hike in history, the so-called “Inflation Reduction Act” (IRA) – enacted by the Biden-Harris Administration two years ago tomorrow – provides a blueprint for the type of welfare for the wealthy and well-connected tax policies Democrats will demand while taking more out of the pockets of working families and small businesses. The projected cost of the IRA’s special interest tax breaks has more than doubled since enactment – including a 542 percent increase in the cost of the law’s electric vehicle (EV) battery production credits – and helped contribute to the over 20 percent rise in prices we have seen under the Biden-Harris Administration’s inflation crisis that is harming working families. These taxpayer-funded handouts will flow overwhelmingly to the wealthy, big banks, and billion-dollar corporations.
At the same time, the Biden-Harris Administration has spent the past two years actively undermining the IRA’s supposed restrictions on “foreign entities of concern” having access to the law’s energy credits, writing regulations that will allow businesses with ties to the Chinese Communist Party to receive U.S. taxpayer-funded subsidies.
House Ways and Means Committee Chairman Jason Smith (MO-08) issued the following statement marking the two-year anniversary of the IRA becoming law:
“Two years into the IRA’s experiment in far-left liberal economic policy, the cost to taxpayers from the law’s special interest tax breaks has more than doubled. While working families pay for the rising costs, 90 percent of such subsidies will flow to billion-dollar companies and nearly 80 percent of the electric vehicle tax credits will be claimed by households earning over six figures. Since its enactment, the Biden-Harris Administration has doubled down – going so far as to skirt the law’s restrictions around subsidies for ‘foreign entities of concern’ so that corporations backed by the Chinese Communist Party will still get their hands on U.S. tax dollars. Having realized that the IRA’s drug pricing scheme is – as Republicans and many others predicted – going to drive up the cost of Medicare’s prescription drug coverage premiums for seniors, the Biden-Harris Administration is now planning to provide a taxpayer-funded bailout to insurance companies to try and cover up their failure.
“As Republicans are fighting to protect America’s working families and small businesses from the largest tax hike in history – which Vice President Harris has pledged to enact on ‘day one’ – we are reminded on the second anniversary of the Biden-Harris Administration enacting the IRA that when given control of Washington, Democrats will reward the wealthy while leaving working families behind. They’ll empower the IRS to audit more low-income families while giving $64 billion in expanded Obamacare tax subsidies to wealthy households. The two-year anniversary of the IRA is a reminder of, and testament to, the command and control model of government that Washington Democrats wish to impose on the American people: policies that grow the Washington bureaucracy, harm patients, and benefit the wealthy, big banks, billion-dollar companies, and China.”
Key Facts:
- The Joint Committee on Taxation (JCT) now estimates that the IRA’s special interest tax breaks will cost at least $650 billion, a 240 percent increase above the original score.
- Numerous outside entities have estimated the IRA’s green corporate welfare will cost well in excess of $1 trillion.
- The IRA gives wealthy taxpayers a $7,500 tax credit for luxury electric vehicles and expands Obamacare subsidies to the wealthy.
- 78 percent of EV tax credits are claimed by filers earning over six figures.
- IRA charged taxpayers $64 billion to expand Obamacare taxpayer subsidies to wealthy households making as much as $599,000.
- 90 percent of the IRA’s special interest tax breaks will flow to companies that make over $1 billion in sales every year according to JCT.
- The Biden-Harris Administration is lowering trade standards through non-Congressionally approved frameworks and “critical mineral deals” that offer foreign countries billions of taxpayer dollars and keep America dependent on China for critical minerals.
- The Biden-Harris Administration’s final rule implementing the supposed IRA restrictions on foreign entities of concern still allows certain EV and battery component inputs directly sourced from the Chinese Communist Party to receive U.S. taxpayer funded subsidies.
- The Congressional Budget Office predicts the IRA will raise drug launch prices, reserving new cures for only the wealthiest Americans.
- Obamacare spending is now projected to be $382 billion moreover the next decade than it was prior to passage of the IRA.
- IRA handed the IRS $80 billion to hire 87,000 new agents to increase audits on working families.
- 87,000 new agents would more than double the size of the IRS, giving the agency more employees than Border Patrol agents, and the FBI, State Department, and Pentagon combined.