President Joe Biden is apparently planning to break his 2020 campaign vow to not raise taxes on American families making less than $400,000 — as the $433 billion Inflation Reduction Act will indeed raise taxes on middle-class workers to the tune of $16.7 billion over a decade.
The finding comes from the nonpartisan Joint Committee on Taxation's (JCT's) review of the latest proposed budget reconciliation bill as hashed out between Senate Majority Leader Chuck Schumer, D-N.Y., and moderate Sen. Joe Manchin, D-W.Va.
"While Republicans' pro-growth tax reform in 2017 reduced tax rates for all Americans in a way that increased the progressivity of the tax code and produced historic gains in job and wage growth, the Democrats' approach to tax reform means increasing taxes on low- and middle-income Americans to fund their partisan Green New Deal," Sen. Mike Crapo, R-Idaho, the ranking member of the Senate Finance Committee, wrote in a statement.
"Americans are already experiencing the consequences of Democrats' reckless economic policies. The mislabeled 'Inflation Reduction Act' will do nothing to bring the economy out of stagnation and recession, but it will raise billions of dollars in taxes on Americans making less than $400,000."
Crapo requested the review of the bill from the nonpartisan JCT, which estimated the Democrats' tax-and-spend proposal will increase taxes on millions of Americans across every income bracket, with more than half of the tax increases on Americans making less than $400,000 per year.
Among the top-line findings from the JCT review commissioned by the Senate Finance Committee Republicans, according to the release:
- When the law would take effect in 2023, taxes will increase by $16.7 billion on taxpayers earning less than $200,000 — a nearly $17 billion tax targeted solidly at low- and middle-income earners next year, amid stagflation.
- The proposal would raise another $14.1 billion from taxpayers earning between $200,000 and $500,000.
- 98% of all tax returns filed by those in the $200,000 to $500,000 category are filed by those earning between $200,000 and $400,000, with at least three-fourths of the income in the $200,000 to $500,000 category also coming from those below $400,000, meaning it is likely at least half of all new tax revenue raised next year would come from those earning under $400,000.
- By 2031, when the new green energy credits and subsidies provide an even greater benefit to those at higher incomes, those earning below $400,000 are projected to bear as much as two-thirds of the burden of the additional tax revenue collected that year.
"The more this bill is analyzed by impartial experts, the more we can see Democrats are trying to sell the American people a bill of goods," Crapo added.
Also, the University of Pennsylvania's Wharton business school released a budget model from the bill, concluding "a very low level of confidence that the legislation will have any impact on inflation."
"Nonpartisan analysts are confirming this bill raises taxes on the middle class and produces no meaningful deficit reduction when gimmicks are removed and the full cost is accounted for," Crapo's statement concluded.
"It's no wonder this bill, which was drafted behind closed doors, is being rushed through the Senate at record pace."
The Inflation Reduction Act is a spinoff of the failed Biden Build Back Better plan, as hatched between Schumer and Manchin, who was the 50th vote in the 50-50 Senate the Democrats have long sought.
Democrats can pass the spending package with only Democrat (48) and independent votes (2) in the Senate, because budget reconciliation does not require the usual 60 Senate votes to break a filibuster. Vice President Kamala Harris would cast the tiebreaking 51st vote if the Democrats and independents all vote for the bill.
"I agree with my Republican friends: We should not increase taxes," Manchin told NBC's "Meet The Press" on Sunday morning.
"And we did not increase taxes," Manchin added, denying the JCT findings.
Also, in another JCT review, American manufacturers are going to shoulder almost half of the corporate tax hikes, potentially damaging the U.S. economy and forcing more businesses to flee overseas.
The attack on U.S. manufacturing, as alleged by the JCT and Crapo denouncing Democrats' tax-and-spend plans, comes as Congress has passed a $200 billion bill to boost U.S. semiconductor manufacturing.
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