President Joe Biden claimed over the weekend that the so-called Inflation Reduction Act of 2022 would not raise taxes on those making less than $400,000 per year, but a non-partisan organization that crunched the numbers says it will.
“The Inflation Reduction Act of 2022 will lower health care costs for millions of Americans,” Biden claimed in a tweet Sunday afternoon. “And, for the first time in a long time, make the largest corporations pay their fair share without any new taxes on people making under $400,000 a year.”
Republicans on the Senate Finance Committee released data Saturday from the nonpartisan Joint Committee on Taxation (JCT) that showed that taxes will increase in calendar year 2023 for everyone under the plan except those making between $10,000 and $30,000 per year.
Those making under $10,000 will see a .3% increase in their federal taxes; those making between $30,000 and $75,000 will see a .1% increase; those making between $75,000 and $100,000 a .2% increase; those making between $100,000 and $500,000 a .3% increase; those making between $500,000 and $1,000,000 a .5% increase; and those making over $1,000,000 a year will see a .6% increase, according to the JCT.
CNN broke down the new taxes a different way, reporting that the tax increases next year would total $16.7 billion for Americans making less than $200,000 per year; $14.1 billion for those making between $200,000 and $500,000 a year, and $23.5 billion for those making $500,000 or more per year.
Sen. John Cornyn (R-TX) responded to Biden’s tweet by writing that the plan would subsidize the rich at the expense of the poor.
“It will subsidize the wealthy at the expense of working families, raise taxes on workers making as little as $10K a year, and unleash an army of IRS agents on taxpayers,” Cornyn wrote. “Oh, and it won’t reduce inflation anytime soon.”
It will subsidize the wealthy at the expense of working families, raise taxes on workers making as little as $10K a year, and unleash an army of IRS agents on taxpayers. Oh, and it won’t reduce inflation anytime soon. https://t.co/sktYivdD2O
— Senator John Cornyn (@JohnCornyn) July 31, 2022
A study from Penn Wharton researchers found that the Inflation Reduction Act of 2022 would actually “very slightly increase inflation until 2024 and decrease inflation thereafter.”
“These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation,” the study concluded. “We project no impact on GDP by 2031 and an increase in GDP of 0.2 percent by 2050. These estimates include the impact of debt and carbon reduction as well as capital and labor supply distortions from rising tax rates.”