The Democratically-concocted Inflation Reduction Act (IRA) recalls 1996’s The English Patient. Like the IRA, this film sounded alluring but proved bloated and disappointing.
And, eventually, I came to hate the most overrated film in motion picture history.
This legislative blazing wreck bears the fingerprints of Sens. Chuck Schumer, D-N.Y. and Joe Manchin, D-W.Va.
Their 725-page ruin belies its billing, beginning with its fraudulent title.
While Americans reel under 9.1% year-on-year inflation, IRA neglects the worst price surge since November 1981.
The Penn Wharton Budget Model politely mocks Democrat inflation-reduction claims. "The Act would very slightly increase inflation until 2024 and decrease inflation thereafter," University of Pennsylvania economists reckon. "These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation."
Penn’s chortles grew into guffaws on Thursday when 230 economists penned an open letter slamming Schumer’s scam.
"Unfortunately, the inaptly named 'Inflation Reduction Act of 2022' would do nothing of the sort and instead would perpetuate the same fiscal policy errors that have helped precipitate the current troubling economic climate," reads the communique to congressional leaders.
"At a time when the economy already faces supply/demand imbalances, the residual effects of stimulus, labor shortages, and supply chain disruptions, this bill would compound rather than alleviate many of these problems."
This warning was signed by President Donald J. Trump’s Chair of the Council of Economic Advisers Kevin Hassett, former Federal Reserve President Robert Heller, President Ronald Reagan's Office of Management and Budget Director Jim Miller, Nobel laureate in economics Vernon Smith, and 226 others.
IRA would fight inflation through higher government spending. This is like battling alcoholism with just one more round of drinks.
According to the Committee for a Responsible Federal Budget, IRA would pour $485 billion of high-octane moonshine atop today’s inflationary inferno. This includes:
•$1.5 billion to plant trees
•$9 billion to help rich people buy electric cars
•$60 billion for "environmental justice"
•$64 billion to expand and extend Obamacare subsidies
•$300 billion in corporate welfare for solar and wind projects, green batteries, carbon capture, and more.
IRA also raises taxes by $470 billion, including $213 billion in corporate levies. This is dumb in boom times and idiotic in a recession, in which America is mired after two consecutive quarters of economic contraction — never mind Team Biden’s contradictory linguistic gymnastics. Among these hikes:
•A new 15% corporate minimum tax
•A curbed carried-interest provision
•A boost in crude-oil and imported-petroleum taxes
IRA also would break President Joe Biden’s solemn pledge not to raise taxes on those earning under $400,000. The Congressional Joint Economic Committee (JEC) calculates that Americans earning $200,000 or less would pay at least $30.2 billion in new taxes through 2031 — $16.7 billion next year. Those making less than $10,000 can savor an aggregated $323 million tax hike starting in 2023.
"Let’s go, Brandon!"
The Tax Foundation previews this bill’s potential devastation:
"Using the Tax Foundation’s General Equilibrium Model, we estimate that the Inflation Reduction Act would reduce long-run economic output by about 0.1% and eliminate about 30,000 full-time equivalent jobs in the United States. It would also reduce average after-tax incomes for taxpayers across every income quintile over the long run."
The Foundation added," By reducing long-run economic growth, this bill may actually worsen inflation by constraining the productive capacity of the economy."
IRA also would pump $124 billion into tax enforcement including $80 billion to double the Internal Revenue Service’s headcount. Some 87,000 new inspectors would investigate, audit, and litigate the returns of not just Elon Musk and Mark Zuckerberg, but you and yours.
Why? That’s where the money is.
Citing JEC, The Wall Street Journal editorialized on Wednesday: " . . . from 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year. Only 4% to 9% would come from those making more than $500,000."
"Compassionate" Democrats itch to unleash the IRS hounds, even as honest taxpayers struggle for official help with their returns.
“The agency in the 2022 filing season answered a mere 10% of its phone calls,” the Journal reports. As of May 31, IRS still faced 21.3 million unprocessed returns. Exhausted taxpayers are waiting more than six months for their returns.
Democrats should mop up this mess before spending $80 billion to torture taxpayers even further.
Even worse, IRA’s "most damaging component by far remains its impact on health," argues University of Chicago economics professor Tomas J. Philipson. This bill would empower Medicare to dictate drug prices.
Impertinent pharmaceutical companies could charge more. But that would trigger a tax of up to 95%. This would strangle life-saving innovation.
Consequently, Philipson writes in Newsweek, “Over the next 17 years, the bill would reduce drug industry research and development by about $663 billion, resulting in 135 fewer new medicines. This will amount to a loss of 330 million life-years, about 30 times the loss from COVID-19 so far.”
In short, the Inflation Reduction Act would leave Americans poor, oppressed, sick, and dead.
Please ring the U.S. Capitol switchboard at 202-224-3121.
Tell senators that the Inflation Reduction Act is not as bad as a fiery, near-fatal plane crash in the Sahara Desert.
It’s the next best thing.
Deroy Murdock is a Manhattan-based Fox News Contributor, a contributing editor with National Review Online, and a senior fellow with the London Center for Policy Research. Read Deroy Murdock's Reports — More Here.
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