The Democrats are pushing through a massive tax-and-spending climate/healthcare bill that they’re calling the “Inflation Reduction Act.” But we already know it won’t reduce inflation, thanks to multiple analyses from nonpartisan, highly credible organizations. Still, won’t it at least help grow the economy and create jobs?
A new analysis from the right-leaning Tax Foundation finds that in addition to doing absolutely nothing about inflation, the “Inflation Reduction Act” would have 3 terrible economic consequences.
📊 𝗔𝗡𝗔𝗟𝗬𝗦𝗜𝗦: The Senate #InflationReductionAct would:
🔹 Increase net revenue by ~$324B
🔹 Eliminate 29k full-time equivalent U.S. jobs
🔹 Reduce long-run economic output by .2%
🔹 Reduce avg. after-tax incomes for taxpayers across every income group over the long run
— Tax Foundation (@TaxFoundation) August 10, 2022
1. Reduced Economic Growth
The analysis finds that the plan will reduce the size of the economy by 0.2% over the long-run. (That might sound small, but it translates to billions in income for Americans that will never materialize.)
“This proposal would raise taxes on work and investment, disincentivizing productive activity,” the Tax Foundation explains. “By reducing long-run economic growth, this bill may actually worsen inflation by constraining the productive capacity of the economy.”
2. 29,000 Fewer Jobs
Far from “building back better,” this agenda would destroy jobs, not create them. The Tax Foundation finds that the economy would create 29,000 fewer jobs with these policies in place.
The two biggest factors here are the increase in minimum corporate taxation and the tax on stock buybacks, which would eliminate 20,000 and 7,000 jobs, respectively.
3. Lower Wages
Real wages, factoring in inflation, have already sharply declined under President Biden. But this agenda passing would make matters worse, the Tax Foundation finds, reducing wages by 0.1% over the long-run. (Again, this sounds small, but scaled across the entire economy is a significant chunk of change off our paychecks).
What Kind of Return-on-Investment is This?
Democrats are asking us to invest hundreds of billions of taxpayer dollars in their pet projects and endure huge tax hikes—in exchange for what, exactly?
The American people deserve better.