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U.S. Sen. John Thune (R-S.D.) today discussed how the Democrats’ reckless tax-and-spending spree would hurt South Dakota taxpayers. Thune noted that according to data from the nonpartisan Joint Committee on Taxation, Americans in nearly every income bracket would bear a significant burden of this bill’s tax hikes, with more than half of the increased burden falling on Americans making $400,000 or less.
Thune’s remarks below (as prepared for delivery):
“Mr. President, ‘You don’t want to take money out of the economy when the economy is shrinking.’
“‘You don’t want to take money out of the economy when the economy is shrinking.’
“Those aren’t my words.
“Those were the words of the current Democrat leader in 2008.
“‘You don’t want to take money out of the economy when the economy is shrinking.’
“Apparently it’s a philosophy the Democrat leader no longer subscribes to.
“Because last week, he introduced legislation … to take money out of the economy when the economy is shrinking.
“Democrats’ so-called Inflation Reduction Act – a misnomer if there ever was one, since the bill will do nothing to help alleviate our current inflation crisis – would take hundreds of billions of dollars out of the economy in the form of tax hikes and comes just as our economy posted a second quarter of negative growth.
“Notably, the bill imposes a $313 billion tax hike on American businesses – with roughly half of that increase falling on American manufacturers.
“I guess the president’s commitment to boosting American manufacturing takes a back seat to raising revenue to fund Democrats’ Green New Deal priorities.
“Mr. President, I don’t think I need to tell anyone what happens when you raise taxes on businesses – particularly when the economy is shrinking.
“You get less growth, lower wages, and fewer jobs.
“According to an analysis from the National Association of Manufacturers, in 2023 alone Democrats’ bill would reduce real gross domestic product by more than $68 billion and result in 218,108 fewer workers in the overall economy.
“And ordinary Americans would bear a substantial part of the burden of this tax increase.
“According to data from the nonpartisan Joint Committee on Taxation, Democrats’ bill would increase the tax burden on Americans across every income bracket, with more than half of the increased tax burden falling on Americans making $400,000 or less.
“Next year alone, Democrats’ bill would increase the tax burden on Americans earning less than $200,000 by $16.7 billion.
“Mr. President, Democrats are brazenly attempting to sell this new tax as somehow closing a loophole, instead of hiking taxes on American businesses.
“But that isn’t even close to being the truth.
“When companies pay less than the current corporate tax rate, they’re often simply taking advantage of tax credits that Republicans and Democrats put in place to encourage investment in things like research and development or the production of new technologies.
“Democrats aren’t closing a loophole in the tax code.
“They’re raising taxes on American businesses – at a time when our economy has posted two consecutive quarters of negative growth.
“They’re raising taxes on businesses that are already struggling with historically high inflation.
“Mr. President, Democrats claim they will make large companies pay at least a 15 percent minimum tax.
“But that isn’t true either.
“Because Democrats have created carveouts to their own minimum tax.
“That’s right.
“Not all companies will have to pay the new book minimum tax.
“For instance, green energy companies – and companies that take green energy tax credits – will be allowed to pay less than Democrats’ alternative minimum corporate tax rate.
“In other words, if you are a member of, or invest in, Democrats’ preferred industries, you get special tax treatment under Democrats’ legislation.
“So much for ensuring that all companies “pay their fair share.”
“Mr. President, in addition to their $313 billion tax hike on American businesses, Democrats’ legislation also raises taxes on investment – another bad idea at a time when our economy is already shrinking.
“Perhaps Democrats’ real plan is to reduce inflation by slowing our economy and ensuring that we enter a recession – or stagflation.
“Democrats’ legislation also raises taxes on oil and gas production – even as Americans continue to struggle with high energy prices, including a 75 percent increase in gas prices since President Biden took office.
“And taxes aren’t the only way Democrats raise revenue in this bill to pay for their Green New Deal measures.
“Democrats’ bill also attempts to raise revenue by increasing IRS audits and enforcement.
“Democrats’ legislation gives the IRS an additional $80 billion in funding over 10 years.
“This would allow the IRS to hire an additional 87,000 employees – meaning that the IRS would have nearly three times as many personnel as U.S. Customs and Border Protection, the agency charged with overseeing security at our nation’s borders.
“The IRS’ budget would also substantially exceed Customs and Border Protection’s budget if this legislation is enacted.
“You might think that given the raging crisis at our southern border, the Biden administration would be focused on beefing up funding and personnel for Customs and Border Protection instead of the IRS.
“But you’d be wrong.
“Apparently the need to find money for Democrats’ Green New Deal trumps the need for a secure border.
“Mr. President, of the additional $80 billion that Democrats’ bill would hand to the IRS, 57 percent – or more than $45 billion – would go to enforcement, and 4 percent would go to taxpayer services.
“Four percent.
“As I said on the floor yesterday, we’re talking about an agency that only succeeded in answering about one out of every 50 taxpayer phone calls during the 2021 tax season – and has repeatedly mishandled sensitive taxpayer data.
“To name just one instance, confidential taxpayer information was either leaked or hacked from the IRS last year and shared with the left-leaning ProPublica in order to advance a partisan agenda.
“And more than a year later, the IRS still hasn’t provided meaningful follow-up to Congress or accountability to taxpayers.
“And yet Democrats’ focus is not on improving the IRS’ responsiveness and accountability, but on boosting the number of audits.
“And speaking of those audits.
“No one should think that the IRS would just be auditing major corporations and billionaires.
“No, this bill would result in a lot of audits of small businesses and ordinary Americans.
“In fact, it’s extremely unlikely that Democrats will be able to gather the revenue they’re claiming they can get from increased IRS enforcement unless they audit Americans making less than $200,000.
“Based on data from the Joint Committee on Taxation, 78 to 90 percent of the revenue projected to be raised from under-reported income would likely come from those making under $200,000.
“Only 4 to 9 percent would come from those making more than $500,000.
“Mr. President, after more than a year of high inflation – spurred by Democrats’ reckless American Rescue Plan spending spree – and with an economy that has shrunk for the past two quarters, it’s hard to believe that Democrats are trying to pass hundreds of billions in tax hikes.
“But once again, economic common sense is taking a back seat to Democrats’ big-spending, big-government ideology.
“Democrats have already inflicted a lot of economic pain on the American people.
“And if this legislation passes, there is more to come.
“Mr. President, I yield the floor.”