On Sunday, The Free Press reported how Republicans wanted to get Senate Democrats on the record about controversial issues they’d rather not discuss less than three months for the election during the debate over the ironically named Inflation Reduction Act.
One example was Florida Sen. Marco Rubio forcing a vote on his amendment that would say the only people capable of being pregnant are biological women, and that accordingly all federal pregnancy programs should be restricted to biological women.
All 50 Republicans agreed, while all 50 Democrats rejected the idea.
Then came Sen. Mike Crapo.
The Democrats’ bill contains $80 billion – or more than six times the current IRS budget – that President Joe Biden wants to hire new IRS agents.
Democrats have claimed their work will help fund the massive $730 billion they’re pushing by uncovering tax cheats and unreported taxable income.
Crapo’s amendment on Sunday would prevent the IRS from using any of that $80 billion to pay for audits of tax returns submitted by individuals and small businesses with a taxable income below $400.000.
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“My colleagues claim this massive funding boost will allow the IRS to go after millionaires, billionaires, and so-called rich ‘tax cheats,’” Crapo said Sunday in a press release.
“My amendment would ensure the Democrats’ supersized-IRS proposal cannot violate the president’s pledge to not raise taxes on those making less than $400,000,”
Yet Crapo indicated he and the rest of the Republicans realize that none of the Democrats, nor Biden, want to spare those on the bottom rungs of the income ladder from the prying eyes of the IRS’s army or auditors.
“The reality is a significant portion raised from their IRS funding bloat would come from taxpayers with income below $400,000,” said Crapo. “My colleagues and Americans know the real answer: small business owners, cash-heavy businesses, and those who can’t afford legal teams are easy targets for the new IRS agents and their audits.”
The Democrats then proved Crapo right.
The vote on his amendment was 50-50, with all Democrats opposed.
The analysis of the tax title of the “Inflation Reduction Act of 2022” includes the corporate book minimum tax increase and all energy tax provisions that Joint Committee on Taxation (JCT is able to estimate. It does not include the Superfund tax, the formerly-proposed changes to taxation of carried interest, or a potential excise tax on stock buybacks which would, if included, show potentially even larger burdens on Americans of all income categories.
According to JCT, given the tax hikes and most of the “Green New Deal” tax credits in the Democrats’ tax-and-spend bill:
- In 2023:
- 24.6 percent of taxpayers earning between $10,000 and $20,000 would see a tax increase.
- 61.7 percent of taxpayers earning between $40,000 and $50,000 would see a tax increase.
- 91.3 percent of those earning between $75,000-$100,000 would see a tax increase.
- 97.2 percent of those earning between $100,000-$200,000 would see a tax increase.
- By 2031, long after the expiration of temporary Obamacare tax credit subsidies:
- 71.1 percent of taxpayers earning between $20,000 and $30,000 will face the burden of a tax increase.
- 81.4 percent of those earning between $75,000 to $100,000 will face a tax increase of more than $500.
“The Administration has been very careful to say that the ‘individual income tax rate’ would not change for anyone making less than $400,000 per year, yet everyone knows that the corporate tax burden falls on workers and consumers, as well as owners,” said Crapo, who requested the analysis. “This analysis shows that burdens of the proposed tax increases in the Democrats’ reckless bill would be so substantial and so widespread throughout all income categories that no amount of temporary health credits, or subsidies for $80,000 luxury SUVs, will overcome the tax increase burdens that would be overwhelmingly felt by lower- and middle-income Americans.”
Although not part of the tax title in the “Inflation Reduction Act,” Ranking Member Crapo also requested for the JCT to analyze Democrats’ proposed tax title with the three-year extension of the expanded Affordable Care Act premium subsidies.
The results of that analysis show that even when those subsidies are factored in, tax burdens from the Democrats’ bill on low- and middle-income Americans significantly outweigh any tax and ACA-premium benefits.
- In 2023, the first of three years the extended ACA credit is in effect:
- Only 3.2 percent of those with income between $50,000 and $75,000 get a tax cut (all from the premium credit), while nearly 78 percent of those in that income category get a tax increase.
- Only 2.0 percent of those earning between $75,000 and $100,000 receive a tax cut, while 89.2 percent will get a tax increase.
- Only 0.5 percent of those between $100,000 and $200,000 get a tax cut, while 96.7 percent get a tax increase, with 73.1 percent of them getting a tax increase of more than $500.
- In the years following 2025, when the Obamacare subsidies sunset, JCT’s analysis shows that no taxpayers get a tax cut, with the vast majority of taxpayers bearing significant tax increases.
- In 2031, for example, more than 70 percent of taxpayers earning between $20,000 and $30,000 are facing a tax increase.
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