The Senate has voted along party lines to ratchet up government spending by passing the misnamed “Inflation Reduction Act.” Although it is described as a $740 billion spending package, it is likely to cost far more than that, judging by its fine print. For example, taxpayers will be on the hook for more bad loans. As Phil Kerpen notes, the “bill authorizes” the Commerce Secretary, “Jen Granholm to make $250,000,000,000 in loan guarantees for ‘energy infrastructure.’ That’s a lot of Solyndras. If any substantial portion of these loans go bad,” the budget deficit could rise further.
As the New York Post observes, “The bill also dumps another $369 billion into green boondoggles, which also acts as a slush fund for Democrats.” For example, it includes “$60 billion for ‘environmental justice,‘” which entails race-based wasteful spending.
Contrary to its name, the bill won’t cut inflation. “The University of Pennsylvania’s Wharton School examined the bill. Here’s what it concluded: ‘The impact on inflation is statistically indistinguishable from zero.’” Worse, “the Act would very slightly increase inflation until 2024.”
The bill will also result in drug manufacturers raising the launch price of drugs. That will cost consumers more.
It also won’t do much to fight climate change, even though that’s one of its stated goals. Its recycled proposals push many of the same political pork and big-government agenda items that were found in Biden’s failed Build Back Better plan. As the Climate Change Dispatch notes, “The Inflation Reduction Act of 2022 is crammed with the very same spending, corporate welfare, price fixing, and tax hikes that were part of Build Back Better.” It reflects the progressive mindset described by Ronald Reagan: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
The Daily Caller reports:
The Senate passed the $740 billion Inflation Reduction Act on Sunday afternoon after an all-night session lasted more than 15 hours.
The package, negotiated by Democratic Sens. Joe Manchin of West Virginia and Chuck Schumer of New York, passed along party lines, with Vice President Kamala Harris breaking the upper chamber’s 50-50 tie. The bill includes nearly $370 billion in green energy subsidies and tax credits, nearly $80 billion in funding for the Internal Revenue Service and a drug price setting mechanism for Medicare. It also establishes a 15% tax on corporations with market caps higher than $1 billion.
[T]he bill will likely raise taxes for Americans in every bracket, despite President Joe Biden’s pledge to not raise taxes on anyone making less than $400,000 a year. …
Senators voted down 35 amendments and passed two, with the 48 Democrats and Independent Angus King of Maine [who caucuses with Democrats] agreeing that they would oppose all amendments offered during vote-a-rama to offer the legislation its best chance of passing.
The bill contains a huge amount of new funding for the IRS. Some increase in IRS funding is appropriate to hire enough staff to catch tax cheats. But the sheer size of the increase may be excessive and could lead to overbearing behavior by IRS agents toward the public. “Even Obama-era IRS chief John Koskinen, an advocate of increasing the IRS budget, thinks $80 billion in new funding for the agency — the amount long sought by the Biden administration and in the current Senate Democrat reconciliation bill — is too much,” notes Americans for Tax Reform. If the IRS has excessive funding, it may result in IRS agents becoming so numerous that many of them spend their time twiddling their thumbs and doing little. It could also result in IRS agents demanding that honest taxpayers pay back taxes and penalties by taking advantage of ambiguities in the tax code to make dubious, unfair demands (such as applying new, creative interpretations of tax rules to people’s past tax returns). The IRS may be able to afford adopting interpretations slanted in its favor, once it has hired enough agents to engage in protracted administrative and legal battles that it would have avoided in the past due to limited manpower.
This article is republished with permission from Liberty Unyielding.
Image Credit: Flickr-Marco Verch Professional, CC BY 2.01 comment