The Democrats have been making a lot of promises about the Inflation Reduction Act, but their newly enacted law isn’t what they claim it is — starting with the name.
SO WHAT
Nobody should be falling for the Democrats’ tricks.
WHAT HAPPENED
Here are four false claims about the IRA you may have heard, debunked.
1. THE IRA WILL REDUCE INFLATION.
False: As Jeffrey Sachs put it on MSNBC Wednesday, the law “isn’t about inflation reduction. That’s marketing.”
Any impact on inflation will be “statistically indistinguishable from zero,” according to an analysis last month by the Wharton School of the University of Pennsylvania.
2. ONLY THE RICH WILL PAY MORE TAXES.
Nope: While the IRA doesn’t directly raise taxes on middle-class Americans, it gives the IRS $80 billion to crack down on collection, and guess who may be hardest hit?
The Heritage Foundation recently estimated that taxpayers making less than $75,000 a year will pay one-fourth of the $300-billion total, slightly less than those who earn $75,000-$200,000.
3. EVIL CORPORATIONS WILL PAY THEIR FAIR SHARE.
Not quite: Manufacturers, not Amazon and Citigroup, will pay half the new taxes created by the IRA’s 15% corporate minimum tax, per the National Association of Manufacturers.
That would mean fewer jobs and lower wages for factory workers.
4. THE DEFICIT WILL BE REDUCED.
Unlikely. On paper the IRA raises $300 billion more in taxes than it spends over the next decade, but, in a classic Democratic accounting trick, some of the spending phases out early.
If the Democrats managed to extend the IRA’s $64 billion in “Obamacare” subsidies from three years to 10 years, the package would end up growing the deficit.
WHAT REPUBLICANS ARE SAYING
Sen. Tim Scott, R-S.C., has led GOP backlash to the law as deceptive waste of money.
