So, where does this alleged tax increase come from? Here’s what Krugman says:
“What the JCT projects instead are ‘distributional effects,’ an attempt to estimate the indirect burden on families resulting from other taxes, which in this case essentially means the possible effect on wages of requiring large corporations to pay a minimal amount of tax.
“Estimating these effects is useful, but are they a ‘tax increase’ on workers? Almost any government policy will have an adverse effect on the income of someone, somewhere; is everything the government does a tax increase?”
The answer to that is no.
Krugman adds a couple of other key points: One is “the JCT assumes that a significant part of the revenue to be gained from taxing corporations would eventually come out of wages. That’s an area of intense academic debate, but there are good reasons to believe that when you’re cracking down on tax avoidance (which the act does with increased funding for Internal Revenue Service enforcement), the effect on wages is actually minimal.”
Also, “despite all the ways the JCT analysis tilts the playing field against the Inflation Reduction Act, the claimed increase in middle-class taxes is tiny. For example, according to the JCT, the federal tax rate on families earning between $50,000 and $75,000 a year would rise from 13.0 percent to … 13.1 percent.”
Not surprisingly, the Republicans conveniently don’t talk about the positive financial effect of the bill.
More Krugman: “If we’re going to consider the indirect effect on family incomes of legislation that doesn’t directly affect their taxes, why not consider the whole act, not just part of it? The JCT table that Republicans are citing notes that it excludes the impact of several major pieces of the bill that would help families, in ways ranging from reduced drug costs and larger health insurance subsidies to clean-energy incentives. Add those in and the middle class almost surely ends up ahead.
“Another point I haven’t seen emphasized is that the bill would probably reduce air pollution in general, not just greenhouse gas emissions, which would have major health benefits –and monetary benefits, too.”
Krugman knows what he’s talking about. He’s a distinguished professor at the City University of New York Graduate Center, and he won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography.
I’ll take his analysis over a GOP political hack reading prepared talking points about a bill that goes against everything the Republican’s pro-rich, anti-poor-and-middle-class, anti-environment agenda stands for.
That’s why the cherry-picking GOP is blatantly lying.
As has been written here before, the law would have some corporations pay closer to their fair share of taxes, help address climate change and the fossil fuel industry’s contribution to this building crisis, lower some Medicare drug costs through negotiations and, in turn, the profits of the big drug companies, help people to get affordable health care, and increase enforcement against tax cheaters, who are often the rich.
Do you really think the Republicans want you to know the truth?
As you can see here, the answer to that is a resounding no.
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Musings of a Nobody 