Inflation Reduction Act: Another Biden Deception

Democrats' green energy boondoggle, disguised as the Inflation Reduction Act, unleashes $485 billion in new federal spending and tax credits in the middle of the highest inflation in 40 years. The legislation includes $468 billion in new taxes weeks after the nation officially plummeted into a recession. 

By enlisting the media's support, Democrats have successfully packaged the legislation as a climate game changer that will reduce the deficit.  The Democrats' political propaganda has been drummed into the national conscience.  Only one problem. It's mostly untrue.  

Here is a list of the most egregious examples of sleight of hand in the massive, 755-page bill that passed without a single Republican vote:

• Despite the administration claims, an independent review of the bill reveals the act will have "no meaningful effect on inflation in the near term." By reducing long-term economic growth, the bill may actually worsen inflation, according to another study.
• The act contains $80 billion in funding for the Internal Revenue Service (IRS) to double the size of the agency by recruiting and hiring of 87,000 new employees. Don't call these recruits "agents" because it offends the administration.
• Reforms in prescription drug pricing, billed as saving Americans billions of dollars, will have little or no impact for at least seven years. And it excludes those individuals with company provided insurance.  
• President Biden insisted the new minimum 15% tax on corporations was aimed at big firms that pay no federal tax. In actuality, the new law raises taxes on all corporations currently paying less than the 15% rate. 
• Hailed as revolutionary, the green energy section contains $386 billion in spending for so-called energy security and climate change.  Yet, $4.275 billion will go for rebate programs for consumers, including those on Indian Reservations, who install water pump heaters, electric stoves and ovens, insulation and ventilation.  

                                             Inflation Reduction

The Wharton School of Business at the University of Pennsylvania estimates the Biden act will reduce inflation by around 0.1 percent by the middle of the first decade under this bill.  In addition, the new law would slightly "reduce GDP" in the first decade while  increasing economic growth by 2050. 

Deficit reduction is just a gleam in the eyes of the Congressional Budget Office (CBO), especially after President Biden issued an executive fiat forgiving student debt for 43 million borrowers. Preliminary estimates are the costs will be about half-a-trillion dollars.  So much for deficit reduction. 

                                                IRS Spending

Originally, the president proclaimed the new IRS agents would go after greedy billionaires.  But when Forbes reported there were 735 billionaires, 87,000 new non-agents (insert laughter here) appeared to be overkill.  The new party line is the IRS recruits will zero in on taxpayers making over $400,000.

Anyone who believes the administration's "fact-sheet" that asserts the non-agents will collect $124 billion in new taxes knows nothing of IRS history.  In 2010, Congress showered millions on the IRS in hopes of raising $9 billion in new revenue.  The results were deplorable.

The bloated agency, which already has 78,661 employees, spent $574 million to collect $14 million in new taxes.  From fiscal 2015 to 2017, the IRS audited 73% of returns from taxpayers earning $200,00 and lower after stating its mission was to target high-earners. 

 

                                                Prescription Drugs

The American Medical Association (AMA) reviewed the bill's provisions for lowering prescription drug prices and praised the reforms. However, the top 10 drugs, which account for 40% of Medicare Part B drug spending, likely won't be eligible for negotiated prices until 2029.  That's not a typographical error.

                                                Corporate Taxes

The president initially claimed 55 corporations paid no federal taxes in 2021.  His statement had to be walked back.  Actually 26 companies in the S&P 500 and the Fortune 500 paid no taxes.  The 15% minimum would apply to hundreds of firms that paid federal taxes but at a lower rate.

Corporate taxes are ultimately paid by the firm's  customers. Companies pass along the cost in the form of higher prices.  

                                                        Green Energy 

Two of the beneficiaries of the $386 billion in climate spending will be electric car buyers and the solar industry.  Under the act, the business investment tax credit will be lifted to 30% for solar construction projects before the end of 2024.  Purchasers of pricy electric vehicles will receive generous rebates. 

The act changes the current law to give electric vehicle  purchasers an instant $7,500 credit on new cars and $4,000 on used EV's.  Under the old provisions, buyers applied for a tax rebate post-purchase. With the average cost of a new EV reaching  $66,000, few middle-income Americans will reap the benefits.

For an administration which thinks it needs a ministry of disinformation, the Inflation Reduction Act qualifies as misinformation. What little trust Americans had in government, has been ripped to shreds by this disguised legislation. Truth in legislation is an oxymoron in Washnington.