A new report published on Tuesday revealed that inflation under President Joe Biden is costing American families an average of $5,000 per year.
The report by the Washington Examiner noted West Virginia Democratic Sen. Joe Manchin is correct to speak out over his concerns regarding inflation that is impacting the nation’s households worse than any time in the past 40 years.
The painful Biden inflation tax is costing the typical family $5,000 a year, writes Bruce Thompson.
"Top line: The Senate needs to stop this massive tax and spending bill."https://t.co/q9FL0W2JaQ
— Washington Examiner (@dcexaminer) January 11, 2022
The report based the $5,000 “Bidenflation tax” on two recent studies.
“A new analysis by the Penn Wharton Budget Model found inflation costs the average U.S. household $3,500 in higher prices. The analysis showed that ‘inflation requires the average U.S. household to spend around $3,500 more to achieve the same level of consumption of goods and services as in previous years,'” Bruce Thompson noted in the report.
Worse, the same study found that lower-income households are impacted more.
The second part of the inflation “tax” was based on inflation pushing taxpayers into higher tax brackets, resulting in higher taxes.
A recent Congressional Budget Office report showed that just “a 1 percent increase in inflation would increase individual income taxes by 1.1 percent.” The two factors combine for tremendous additional stress on American family finances.
“At today’s 6.8% inflation rate, this translates into a 7.5% tax increase, a $1,500 tax increase for a household earning the median family income. With $3,500 in lost purchasing power and $1,500 in higher taxes, this painful Biden inflation tax is costing the typical family $5,000 a year,” Thompson noted.
U.S. Senate Finance Committee Ranking Member Mike Crapo (R-ID) said in a December statement that if the Democrats’ reckless tax-and-spend bill is passed, American households can expect this stealth tax to be even higher.
“Americans have been extremely clear that inflation and rising costs are their top concerns right now,” Crapo wrote.
“Inflation is now at 6.8 percent, reaching a near 40-year high. The producer price index is up 9.6 percent, the fastest pace on record. This analysis is telling us that even without the Democrats’ reckless tax-and-spend legislation, lower-income households will experience a $3,500 stealth tax. If Democrats push forward with their bill, which is front-loaded with inflationary spending and full of job-killing tax hikes, Americans can expect to pay even more to keep up with rising costs without getting ahead,” he added.
An op-ed by Freedom Works economist Stephen Moore highlighted the concern in remarks responding to Biden’s speech after the December jobs reports.
“While the president was boasting of wage gains for bartenders, kitchen help and waitresses, he ignored an inconvenient truth: for six straight months now, prices have been rising faster than wages,” Moore wrote.
"Most low/moderate income workers are suffering a DECLINE in the purchasing power of their paychecks. The Biden Inflation Tax is a direct result of all the debt spending that is pouring like an uncapped fire hose into the economy. " #Bidenflation #ampFW https://t.co/H47FDbjDWr
— FreedomWorks (@FreedomWorks) January 10, 2022
“Wages are up on average by about 4.6% this past year, but price inflation is up more than 6%,” he added.
In a related Twitter post, Freedom Works noted: “Most low/moderate income workers are suffering a DECLINE in the purchasing power of their paychecks. The Biden Inflation Tax is a direct result of all the debt spending that is pouring like an uncapped fire hose into the economy.”