NEW Fox News articles can now be heard on audio! The Inflation Reduction Act, a reconciliation bill sponsored by Sens. Joe Manchin and Chuck Schumer, is misleadingly called since it will really make Americans’ inflation problems worse while simultaneously boosting taxes, an economist told Fox News.
The moniker the Democrats gave this piece of legislation is “the biggest example of false marketing today,” research scholar at the Heritage Foundation EJ Antoni told Fox News. “It does absolutely nothing to deal with the inflation issue.”
A scaled-down version of President Biden’s Build Back Better Act, the Inflation Reduction Act was unveiled by Manchin and Schumer on Wednesday. It would cost $433 billion, the majority of which will go toward climate-related elements. The Committee on Taxation projects that a number of initiatives, such as a minimum tax rate on large firms and increased IRS enforcement, will raise $739 billion.
According to Antoni, it “does nothing to solve the issue of inflation and instead merely exacerbates the already high prices and will drive prices even higher.” “It’s only making things worse,”
Along with Senate Majority Leader Chuck Schumer, Sen. Joe Manchin has been a driving force for the Inflation Reduction Act. Associated Press
Inflation will be reduced, according to supporters of the Act, through features including deficit reduction and limiting the rise in prescription medicine costs.
The former chairman of the White House Council of Economic Advisers, Jason Furman, wrote in The Wall Street Journal , stated that studies have repeatedly shown that raising interest rates and reducing the deficit, whether through higher taxes, less spending by the government, or a combination of the two, as in the Inflation Reduction Act, both lower inflation.
On June 13, 2022, shoppers in Los Angeles, California, U.S., browse a supermarket as prices for goods and services rise. Lucy Nicholson/REUTERS Lucy Nicholson/REUTERS
However, Antoni claimed that increasing taxes to counter rising prices is an incorrect understanding of inflation.
According to Antoni, there is fundamentally too much money in the economy in comparison to the amount of products and services available. Therefore, all you’ve accomplished is a money transfer from one person to another, the taxpayer to the government, if all you do is raise taxes.
But the quantity of goods and services in relation to the total amount of money in the economy hasn’t changed, he continued. So it has no impact on reducing inflation.
The increased taxes, according to Antoni, will affect customers.
The Inflation Reduction Act, according to New York senator and majority leader Chuck Schumer, stands good to its name. (AP)
Because energy influences everything we do and everything we buy, there will be taxes on energy that will be passed through to the customer at all different levels, according to Antoni. Just as increasing prices for diesel and gasoline over the last 18 months have trickled down everything else into consumer spending, those prices will eventually spread to everything else.
Democrats have nonetheless backed the law.
The closing of an egregious loophole for some billionaire/millionaire investors and the necessity that the largest firms pay SOME corporate tax are the only tax increases in the Inflation Reduction Act, according to Sen. Chris Murphy tweeted . The cost of drugs and energy for average Americans is reduced because to this money.
During his campaign, Vice President Joe Biden pledged not to increase taxes on people earning less than $400,000.
The bill, according to Antoni, would also violate Biden’s campaign promise , which states that no one making less than $400,000 will see their taxes raised.
According to Antoni, who spoke to Fox News, “this would just be the latest in a long line of instances when Biden has breached his vow not to raise taxes on folks making $400,000 or less a year.” The Biden administration’s largest tax is inflation, which disproportionately affects the poor and those with modest incomes.
White House officials have denied claimed a recent study demonstrating the opposite was “incomplete” because it “omits the actual benefits that Americans would receive when it comes to prescription drugs and when it comes to the lowering energy costs, like utility bills.” Biden had made a pledge not to support legislation that would violate this.
Fox News Digital Originals assistant producer and writer Lisa Bennatan. On Twitter, Lisa Benedict, and Instagram, Lisa Benedict, you can follow her.