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Thune: It is Reckless to Raise Taxes in a Recession

“How are more IRS audits going to help Americans wondering how they can continue to afford to pay more than $4 a gallon for gas? How’s the new tax on businesses going to drive down the price of chicken or milk or fruits or vegetables?”

July 28, 2022

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U.S. Sen. John Thune (R-S.D.) today discussed this morning’s report that the United States has experienced two consecutive quarters of negative economic growth, which is the traditional definition of a recession. Thune stressed that Democrats’ latest reckless tax-and-spending spree would waste taxpayer dollars, slow economic growth, and do nothing to help families who are facing steep costs due to historically high inflation.  


Thune’s remarks below (excerpts):


“Yesterday afternoon, Democrats, Senator Manchin, Joe Manchin from West Virginia, and their leadership announced the latest version of their Build Back Better tax-and-spending spree, which they are bizarrely calling the Inflation Reduction Act.”

“So let me just tell you a few of the things that the bill does. It imposes a new tax on job creators. It provides funding to the IRS to harass small businesses and nonprofits. It provides tens of billions of dollars in tax credits for Green New Deal projects and the purchase of costly electric vehicles. And it extends increased government subsidies for people on Obamacare.


“Well, Mr. President, I think the question you have to ask is, what exactly is any of that going to do to address inflation? How are more IRS audits going to help Americans wondering how they can continue to afford to pay more than $4 a gallon for gas? How's the new tax on businesses going to drive down the price of chicken or milk or fruits or vegetables?


“And as for electric vehicle tax credits, they might make purchasing an electric vehicle slightly less painful. But that is if you can afford to purchase one in the first place, especially in the midst of an inflation crisis.”


“This bill isn’t going to do anything about inflation. It's not going to do anything for economic growth. In fact, I wouldn't be surprised if this bill's new tax on businesses actually slows down parts of our economy. And it begs the question, Mr. President, about why you would need new taxes when the taxes that are coming into the treasury already are, frankly, at record levels.” 


“So the Joint Economic Committee did an analysis recently, which found out that the increase in cost for an average American family year over year, as a result of this level of inflation, is about $9,000. So, that's $9,000 more for the same basket of goods, the same basic necessities, that Americans bought last year.” 

“And so you already have this huge tax on American families because of inflation. Now, you couple that with the fact that the economy is slowing down, it's getting a little wobbly, and you would think, you would think just intuitively, that when you have an economy like that, the last thing you would want to do – the very worst prescription for high inflation and slow growth – would be more taxes and more spending.”

“So instead of lowering energy costs by increasing supply, opening up federal lands, approving permits to drill, approving infrastructure projects, encouraging investment in energy production in this country, instead of discouraging it and pressuring companies not to invest in energy production. This has the opposite effect. It's going to tax energy. It's going to put a tax on energy. So you're going to have higher electricity costs, higher fuel costs. I don't get it. I honestly don't get it.”


“But the fact of the matter is that Democrats like to grow and expand government. They like more government. They like more government control. And this [bill] achieves that in a lot of ways. Obviously, it makes people more dependent upon government.”


“Mr. President, I hope my Democrat colleagues will think better of this. I can’t think, honestly, of a time where there hasn’t been a worse prescription for what ails our economy and ails our country than what is being proposed here in the form of more taxes, more spending, more government control, and more pain, economic hardship, for the American people.”