WASHINGTON D.C. – Congressman Doug LaMalfa, R-Richvale, voted on Aug. 12 against H.R. 5376, what he refers to as “the mislabeled Inflation Reduction Act of 2022.”
“This Democrat tax and spend bill will significantly increase taxes on capital investment by U.S. companies, expand Obamacare, add $146 billion in new debt, and increase taxes on middle- and lower- income Americans – something President Biden promised he wouldn’t ever do,” LaMalfa said.
According to Congressional Budget Office estimates, the bill will have a negligible effect on inflation this year and would only reduce inflation by .01 percent at best in 2023, LaMalfa’s office said.
“The first time Democrats used the ‘reconciliation process,’ they kickstarted inflation and set a 40-year record,” LaMalfa added. “Using reconciliation again is certain to increase prices even more.
He said the American people are facing the highest inflation tax in over 40 years, requiring that they dip into their savings just to make ends meet.
“They don’t need more taxes to weigh them down further,” he added. “Record breaking inflation doesn’t have to be the new normal. This 18-month government-spending-spree has brought on record inflation, historic gas prices, and a recession. When will Democrats learn that increased government spending actually drives up inflation? I voted against this reckless spending package to protect Americans’ pocketbooks from this leftist farce.”
The following are claims made by LaMalfa’s office and what the act actually does:
– Claim: Adds $745 billion in new spending, which includes $248 billion for Obamacare subsidies and over $400 billion for far-left Green New Deal programs and giveaways to green special interests significantly increasing the nation’s reliance on China – which controls 80% of the minerals necessary for supporting the Democrats’ expensive and unreliable green energy agenda. “This will funnel of billions of dollars to benefit the Chinese Communist Party and effectively subsidizes their genocide of Uyghur Muslims,” LaMalfa said.
– Fact: Enhanced tax credits that helped thousands of people afford health insurance during the COVID-19 pandemic will continue until 2025 under the Inflation Reduction Act. Premium tax credits for people who buy health insurance through healthcare.gov or state-based marketplaces were expanded during the pandemic to make health insurance more accessible for people who’d lost jobs or experienced a dip in income. The credits were set to expire in 2023, which would have exposed people to steep premium increases next year. The act also includes $370 billion over a decade for investments in wind, solar, clean hydrogen, energy storage and other measures designed to shift the American economy away from fossil fuels. Congress passed another bipartisan bill in July that includes $52 billion for domestic semiconductor manufacturing.
– Claim: Doubles the size of the Biden Administration’s IRS department to roughly 160,000 agents – larger than the size of the British army – authorized to conduct one million additional audits each year against taxpayers. “This wave of auditing agents will be used to intimidate and harass middle-income Americans, not billionaires who can afford the best tax lawyers money can buy,” the Congressman added.
– Fact: The Inflation Reduction Act allocates $80 billion over 10 years to help modernize IRS technology systems and provide more effective tax enforcement and collection. It is estimated that $500 billion to $1 trillion a year in taxes goes uncollected. Middle class American wage-earners have a 95% reliability rate for paying their fair share of taxes, the top 1% of wealthy Americans consistently fail to report 20% of their income. For years, legislators in Congress have blocked giving the IRS the resources it needs to update its computer systems and prevent the steady erosion of its enforcement capabilities. Charles Rettig, a President Donald Trump appointee and IRS commissioner, said the “areas of challenge for the agency (are) large corporate and global high-net-worth taxpayers.” Experts have estimated that the increased allocation to the IRS could recover $400 to $800 billion in lost revenue over 10 years.
– Claim: Adds $599 billion of tax increases on Americans in every tax bracket despite President Biden’s promise to not raise taxes on Americans making under $400K.
– Fact: An initial analysis of the bill by the nonpartisan Joint Committee on Taxation identified more than $300 billion in higher taxes in the Inflation Reduction Act, most of it from a corporate minimum tax of 15% on companies that report average profits in excess of $1 billion over a three-year period. The Tax Policy Center found the tax provisions of the Inflation Reduction Act would rise by $6,060 (0.3 percent of after-tax income) in 2023 for households in the top 1% – with incomes greater than about $1 million. Households in the top 0.1 percent – those with over $4.4 million of income – would bear an additional burden of $41,580 – 0.4%t of after-tax income. President Biden has pledged not to raise taxes on those making less than $400,000. The Administration said its promise applies only to taxes people pay directly. Looking at just those direct taxes such as individual income taxes and payroll taxes, the Inflation Reduction Act would modestly reduce or not change tax burdens at nearly all income levels in the three years Tax Policy Center modeled (2023, 2027, and 2031). The only exception: Taxpayers in the top 1% in 2027 who would pay more because the bill extends the limitation on pass-through business losses from 2026 through 2028. Under a broader view of tax incidence, families with incomes below $400,000 would bear some of the burden of corporate tax hikes through lower wages or lower returns to stock ownership, particularly in retirement accounts, even if they don’t pay more in direct taxes.
– Claim: Increases the costs of necessary goods and services by adding taxes on crude oil and natural gas production, which trickles down to raised prices at the gas pump for all Americans, while offering electric vehicle and “green” home improvement project subsidies for those who can already afford these luxuries.
– Fact: As mentioned previously, the Inflation Reduction Act includes $370 billion over a decade for investments in wind, solar, clean hydrogen, energy storage and other measures designed to shift the American economy away from fossil fuels. This consumer help with tax credits and loans will help with the purchase and installation of solar panels to improve home energy efficiency, as well as emission-reducing equipment for coal- and gas-powered electricity plants.
Biden was expected to sign the bill into law on Tuesday.