Non-partisan analysis of President Joe Biden’s latest tax-and-spend scheme shows it will raise average taxes for Americans at every income level and either do nothing to inflation or make it worse.
But the worst thing about this bill is the crushing effect it will have on American manufacturing.
The tax portion of Democrats’ imaginatively named “Inflation Reduction Act” hinges on something called the book-income minimum tax.
Basically, this means corporations would pay a 15 percent minimum tax on the income they report to their shareholders.
According to Congress’s non-partisan Joint Committee on Taxation, American manufacturers would take the hit for 49.7 percent of this tax.
That means half of the $313 billion this plan is expected to redistribute will come from U.S. manufacturing industry we’re already struggling to keep here in the U.S.
They should have called it the Manufacturing Reduction Act.
Manufacturing is already hurting from the Biden recession. In a new report out this week from the Institute for Supply Management, U.S. manufacturing expansion has cooled to its slowest pace since the locked-down summer of 2020.
It’s no mystery why U.S. manufacturing is slowing: Americans are cutting back due to Biden’s 9.1 percent inflation pay cut, and supply is stacking up.
And we know who will end up taking the hit from this harebrained scheme: American manufacturing workers and American consumers.
But it’s not just the larger manufacturers that will take a hit from this bill.
Small manufacturers often rely upon large manufacturers as their primary customers. For example, over half of Americans who work in machine shops or screw, nut, and bolt manufacturers work in firms with less than 50 employees.
When you hike taxes for large manufacturers, they buy less from small manufacturers. The negative effects of this tax hike will be felt in small communities across the country.
This bill also includes $80 billion to double the size of the IRS and hire 80,000 new agents to shake America’s couch cushions for every last cent to blow on failed social programs.
The IRS already announced last year it would be increasing the number of small businesses it audits by 50 percent, and that’s before this proposed $80 billion boost to their operating budget.
Large corporations retain teams of lawyers to deal with IRS audits. Small businesses don’t, and this extra hassle adds one more insult to the injury of 9.1 percent inflation.
More Hoosiers in my home state of Indiana work in manufacturing than any other industry, and every year as I visit all 92 counties I hear from manufacturers of all sizes and their employees.
These businesses are already getting hammered by bad fiscal policy in Washington.
Burdening larger manufacturers with a tax hike and small manufacturers with collapsing demand and IRS audits is the last thing this important American industry needs.
The only thing this tax-and-spend spree is sure to do is continue the Obama-Biden legacy of pushing American manufacturing jobs overseas.
Republican Mike Braun represents Indiana in the United States Senate.