President Biden signed into law the “Inflation Reduction Act,” a massive tax-and-spend plan aimed at slashing inflation, growing the economy and addressing climate change. Progressive Democrats like Elizabeth Warren and Bernie Sanders are already celebrating this major political victory. But if they were honest to themselves, progressives would admit that while it could be a political success, the real details of this law betray the working class people they claim to care about.
First and foremost, experts agree almost unanimously that the “Inflation Reduction Act” does absolutely nothing to reduce inflation. Nonpartisan Congressional Budget Office found it That the law would have a “negligible” effect on inflation in 2022, and that by 2023, “inflation will probably be 0.1 percentage points lower and 0.1 percentage points higher under the bill.”
in the same order analysis The Wharton School of Business warns that the huge spending bill will have an effect on inflation that is “statistically indistinguishable from zero.”
Even Sanders himself accepted That the bill would “have minimal impact on inflation,” although he still voted for it.
This alone is a slap on the face of the working class. Inflation is crushing the American people right now, the average American costs too much $717 per month Just to maintain the same standard of living that it was a few years ago. And economists have long noted that the burden of inflation is hardest on the working class, the poor, and retirees on fixed incomes, because they spend a higher proportion of their income than the wealthy and have access to sophisticated financial tools. Not there. that affluent people can employ to offset the losses of inflation.
For Democrats to push a bill they’re promising will reduce inflation that doesn’t really do anything and only pushes partisan pet projects through “let them eat the cake” moments.
Meanwhile, what is actually in the law is only to comfort and torment the oppressed. For example, the bill allocates huge sums for extended subsidies for electric vehicles. I hate to break it to you, but the biggest beneficiaries of this expansion will be the corporate giants—Ford and General Motors already have. raise their prices In response—and affluent Americans are living in wealthy coastal areas. Generally poor people do not buy electric cars.
To be fair, the law includes income caps on who can qualify. But according to Fox Business, families with income up to $299,999 will be eligible for subsidyAnd it can be applied to cars as high as $55,000 and SUVs as expensive as $80,000.
Does this sound like a program targeted at the needs of the working class to you?
Still, the real gut-punch for the working class comes on the tax hike side of the “Inflation Reduction Act.” It funds all corporate welfare and special subsidies, in large part through a new “minimum corporate tax” of 15 percent. While this tax will be formally imposed on corporations, economists agree that’s an important part-some studies As much as 70 percent—eventually through lower wages—will be produced by workers.
The practical impact of this tax increase would be billions more than the actual tax increase on the working class – right when they are already battling extreme inflation and can least afford it.
The bill also supersedes the Internal Revenue Service and promises to squeeze hundreds of billions out of American taxpayers through increased enforcement. Democrats insist that they are only going after “billionaire tax fraud,” but this is simply not true. The Joint Committee on Taxation analyzed the plan and found it That 78 to 90 percent of the money raised through increased enforcement will come from people who make less than $200,000.
While technically not raising taxes, the practical impact of squeezing billions more out of struggling working and middle-class Americans through higher enforcement is similar in terms of their pocketbooks.
In short, the “Inflation Reduction Act” legislation does little to help working-class Americans and really does nothing to solve inflation. Some health care provisions may help people, but they are a very small part of the bill and will also increase costs for everyone who pays taxes. The Bill imposes a heavy tax burden on working class taxpayers and families, directly and indirectly. oh and it Estimate To actually shrink the economy, eliminate jobs and lower wages.
Passing a big law with a good name could be a political victory for Democrats. But the reality of what they have done betrays what progressive people care about.
The views expressed in this article are those of the author.