Democrats’ so-called “Inflation Reduction Act” doesn’t help working families. In fact, middle-income families are four times more likely to be worse off than better off under this bill. Here are key problems with the bill the media isn’t telling you.
Higher Energy Prices:
- The bill’s $25 billion superfund and methane taxes on American energy disproportionately harm middle- and lower-income households through higher prices at the pump and bigger utility bills.
- Taxes on crude and imported petroleum products will be passed on to American consumers in the form of utilities, at gas stations, and higher prices for the goods they buy.
- As Americans for Tax Reform says: “The legislation would impose a regressive tax on oil and gas development based upon emission levels of methane during production, leading to higher energy bills for consumers and higher costs of everyday products.”
- The American Gas Association also makes clear: “These outcomes are inconsistent with President Biden’s commitment to pay for reconciliation without imposing new taxes on lower-income Americans.”
Blue-Collar Workers Pay More to Subsidize the Wealthy:
- An analysis from Congress’s nonpartisan tax scorekeeper shows the landscaping company owner and his workers pay more, while the wealthy homeowner gets checks from Washington for the solar panels on their roof. That’s because the “winners” under Democrats’ tax plan are the earners at the very top. Democrats’ reckless spending plan includes more than $250 billion in Green New Deal subsidies that benefit the wealthy the most.
- The percentage of $1 million-plus households getting a tax cut (19.4 percent) is twice as high as any other income group.
- The group with the next highest proportion of tax cuts is those earning $500,000-$1 million.
- Over the long term, 72.5 percent of households with income over $1 million will receive a tax cut.
More IRS Audits and Compliance Costs:
- At least $20 billion of the revenue Democrats hope to collect from taxpayers with a supercharged IRS would come from lower- and middle-income earners and small businesses, according to a new analysis by Congress’s nonpartisan scorekeeper. That’s in addition to existing audits of these income levels.
- That means higher overhead for working families and small businesses merely to comply with a supercharged IRS, an agency with a long history of abuses.
- As the Cato Institute shows, “The Office of Management and Budget estimates that individuals and businesses currently spend 6.5 billion hours a year on federal tax paperwork, which is equivalent to 3.6 million people working full‐time on this unproductive activity. That ‘Tax Army’ is two and half times larger than our uniformed military of 1.4 million service members…”
Obamacare Subsidies for the Wealthy that Worsen Health Care Inflation
- Democrats’ Obamacare subsidies hide the true cost of health insurance and disincentivize insurance companies from reducing costs, which is why health insurance inflation is already 17 percent over the last year – in fact, at the same time that premiums more than doubled in the individual market, deductibles for Washington-approved coverage also increased by an average of 35 percent — over $1,700 for individuals and $3,600 for families.
- Democrats have made clear they want to make this bill’s three-year extension of Obamacare subsidies permanent, forcing working families to pay $248 billion to bribe people into Obamacare, including people making over 400 percent of the federal poverty level, a group that was never intended to get subsidies under the original health care law.
- The worker shortage and inflation will also worsen, according to CBO, “mainly because of the enhanced health insurance subsidies, pushing down output and pushing up inflation.”
Higher Drug Prices, and Fewer New Cures for Americans with Pre-Existing Conditions
- Democrats’ socialist drug pricing scheme will raise prices on new drugs, despite their claim that their Manchin-Biden Build Back Better bill will lower costs for families, the Congressional Budget Office confirms.
- Higher launch prices for prescription drugs will increase costs at the pharmacy counter and raise insurance premiums, pushing new cures out of reach for most American patients except the wealthiest.
- Loss of innovation is a death sentence for patients and means fewer new treatments and cures. Experts find that Democrats’ price-fixing scheme would kill up to 342 cures, according to a study by the University of Chicago.
Independent Studies: What Inflation Reduction?
- Despite its misleading title, Democrats’ bill will worsen inflation over the next two years and do nothing to bring inflation down in years after, according to Penn-Wharton analysis. Even the White House’s preferred economic forecaster said the bill “won’t be a game changer.”