Democrats have named their new tax-and-spend package the “Inflation Reduction Act,” but the party is battling economists who say the legislation won’t do anything to spare consumers from the rising cost of goods and services, and it could make things worse.
Representatives Spanberger and Wexler voted in favor of the massive spending bill.
William McBride, vice president of federal tax and economic policy at the Tax Foundation, a pro-business, tax policy think-tank, said the legislation would have “close to zero impact on inflation.” He said it also could unleash a potentially disastrous domino effect on the economy and the government through tax increases that might end up reducing federal revenue.
Findings from the Penn Wharton Business Model and the non-partisan Joint Committee on Taxation have indicated the legislation would not only fail to reduce inflation, it would raise taxes on millions of low and middle-income earners.
The JCT, in a preliminary analysis of the proposal, said 2023 taxes would increase by $16.7 billion on those earning less than $200,000, and $14.1 billion for people earning between $200,000 and $500,000.
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