As stated in a released report sent out last week by the Tax Foundation, the new Inflation Reduction Act is slated to slash the after-tax incomes for all Americans across every incoming bracket.
This new piece of legislation sports a staggering $740 billion price tag, which in itself includes a section costing $369 billion to be used to combat “the existential crisis of climate change,” as stated in a recent statement from Old Uncle Joe, who put his autographed to the legislation just last week.
The report highlighted that after-tax income for the individual American across every group besides the top 1% would drop by roughly 0.2%, while those in the top 1% would end up seeing a cut to after-tax incomes by roughly 0.3%.
“On a long-term dynamic basis, the smaller economy reduces after-tax incomes relative to the conventional analysis and most of the expanded tax credits will have expired,” expressed the report. “On average, tax filers in every quintile would experience a drop in after-tax incomes.”
The projected reductions in actual earnings are taking place despite numerous promises from many top officials in Old Uncle Joe’s administration that taxes for any individuals below the $400,000 a year level will not go up. “No one — let me emphasize — no one earning less than $400,000 a year will pay a penny more in federal taxes,” stated Biden as part of a bill signing that took place on Tuesday.
The most dangerous section, at least economically speaking, of the new Inflation Reduction Act is a standard 15% minimum tax on book income for any corporation with more than $1 billion in total profits. As part of a recent survey of the executives which was carried out by PwC, an accounting firm, 28% of respondents cited tax policy as a serious business risk, with leaders of businesses throughout the life sciences and pharmaceutical sector particularly concerned about the provisions from the law geared toward dropped the overall costs of health insurance and prescription drugs.
The model from the Tax Foundation does not seem to think that the $80 billion in funds slated to bring in almost 87,000 new Internal Revenue Service agents, which is slated to spike the total audit rates for Americans classified as middle-class, despite copious promises to the exact opposite from White House officials.
Looking past the tax implications of this new law, inflation is expected to continue its insane climb due to a massive deluge of new and further expanded government programs. “By increasing spending, the bill worsens inflation, especially in the first four years, as revenue raisers take time to ramp up and the deficit increases,” as reported by the Tax Foundation. “To the extent the tax credits and health-care subsidies are expected to be extended on a permanent basis, these policies put upward pressure on inflation.”
To that end, Sen. Joe Manchin (D-WV) — who has previously made a deal with Majority Leader Chuck Schumer (D-NY) in order to push forward legislation through a heavily divided Senate — openly admitted this past Tuesday that the Inflation Reduction Act would not have an immediate effect on the over spikes in price levels.
“Well, immediately it’s not,” Manchin explained to Hillary Vaughn with Fox News. “We’ve never [said] anything would happen immediately, like turn the switch on and off.”