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U.S. Sen. John Thune (R-S.D.) today discussed how the Democrats’ so-called “Inflation Reduction Act” would do nothing to reduce inflation and how it would double down on wasteful government spending and impose hundreds of billions of dollars in tax hikes on American businesses. Thune noted that these tax hikes would result in higher prices for consumers in nearly every income bracket.
Thune’s remarks below (as prepared for delivery):
“Mr. President, we’re somehow continuing to consider Democrats’ grab bag of bad ideas – otherwise known (misleadingly) as the Inflation Reduction Act.
“Let’s start with the bill’s title.
“It gets you feeling hopeful, doesn’t it?
“The Inflation Reduction Act.
“It sounds like a bill that’s going to address perhaps the number-one problem facing our nation: inflation.
“And then you actually look at the bill’s contents … and discover that the bill will do nothing to reduce inflation.
“And you don’t have to take my word for it.
“Here’s what the nonpartisan Penn Wharton Budget Model had to say about the bill’s impact on inflation: ‘The impact on inflation is statistically indistinguishable from zero.’
“‘Statistically indistinguishable from zero.
“The nonpartisan Congressional Budget Office also found that the bill would do nothing to address our current inflation crisis.
“So did the Tax Foundation.
“So much for inflation reduction.
“So what about the deficit reduction Democrats are touting?
“Well, unfortunately there’s a good chance there won’t be much of that either.
“Democrats rely on some very shady accounting to reach their supposed deficit reduction number – most notably counting $120 billion in savings from the repeal of a rule that has never been implemented – and at this point was not expected to be.
“Mr. President, no matter what this rule was predicted to cost, if it was never going to be implemented its cost was effectively $0 – and so repealing this rule leaves you with exactly zero extra dollars to spend – not $120 billion.
“Then there’s the question of the bill’s expanded Obamacare subsidies.
“Democrats’ bill extends the expanded Obamacare subsidies by three years.
“But it’s common knowledge that Democrats want to extend them permanently – as the president explicitly said in his State of the Union address.
“And when you figure in the cost of extending them permanently, most of the purported cost savings in the bill – which Democrats claim will go toward deficit reduction – dwindle away.
“So no inflation reduction. An extremely doubtful amount of deficit reduction.
“Well, there are the hundreds of billions of dollars in tax hikes.
“Yes, Mr. President.
“Hundreds of billions of dollars in tax hikes.
“Our economy has posted two consecutive quarters of negative growth – in fact by any common definition we are now in a recession – and Democrats think now is a good time to hike taxes.
“Businesses that are already struggling with 40-year-high inflation.
“Democrats’ book minimum tax, as proposed last week, would be a $313 billion tax hike, with roughly half of the increase falling on American manufacturers.
“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 the version of the bill Democrats introduced last week would reduce real gross domestic product by more than $68 billion and result in more than 218,000 fewer workers in the overall economy.
“The Tax Foundation also found that the bill would – unsurprisingly – reduce economic growth, reduce wages, and reduce jobs.
“In short, a big part of the burden of Democrats’ tax hike on businesses would fall on American families and American workers.
“And, Mr. President, the book minimum tax on American businesses isn’t the only tax hike Democrats are proposing in this bill.
“They also just reportedly replaced a $14 billion tax hike on investment with a new, $74 billion stock buyback tax designed to punish investors who choose to keep their own money invested in a business – a tax hike that will likely discourage new investment and have a negative impact on Americans’ retirement savings.
“And, of course, they’ve included a number of taxes and fees on oil and gas production.
“I guess Democrats would like our current sky-high energy prices to continue long term.
“Because I’m at a loss for any other reason why Democrats would choose to hike taxes on oil and gas production at a time when Americans are already struggling with high gas prices and high utility bills.
“Mr. President, Democrats didn’t always think raising taxes during a recession was a good idea.
“In fact, President Obama once said, “[T]he last thing you want to do is to raise taxes in the middle of a recession.”
“Or as the current Democrat leader once put it, “You don’t want to take money out of the economy when the economy is shrinking.”
“Unfortunately, now that their Green New Deal fantasies are on the line, Democrats have changed their tune.
“That’s right, Mr. President.
“Democrats are hiking taxes during a recession not to address our border crisis, or inflation, or rising crime, but so that they can implement their Green New Deal agenda.
“Their so-called Inflation Reduction Act is chock-full of Green New Deal spending.
“Things like $1.5 billion – billion – for a grant program to plant trees.
“$1 billion for electric heavy-duty vehicles like garbage trucks.
“$3 billion for the U.S. Postal Service to purchase zero-emission delivery vehicles.
“And $1.9 billion for things like road equity and identifying gaps in tree canopy coverage.
“Yes, Mr. President.
“Democrats are apparently willing to send us into a longer-term recession – or stagflation – in order to provide billions of dollars for things like road equity and identifying gaps in tree canopy coverage.
“All told, Democrats provide more than $60 billion in this bill for ‘environmental justice.’
“To put that number in perspective, that’s more than the federal government spent on highways in 2019.
“The bill also contains at least $30 billion in climate slush funds – part of which is allocated for, among other things, climate-related political activity.
“Yes, Mr. President.
“Climate-related political activity.
“Somehow I don’t think families struggling with ballooning grocery bills and the high price of gas are eager to see their tax dollars going to Green New Deal activism.
“But apparently Democrats disagree.
“And I haven’t even talked about the tax credits and rebates Democrats’ bill would provide for wealthy Americans to purchase new electric vehicles – or remodel their kitchens with Democrat-approved green appliances.
“Mr. President, I could go on for a while here.
“It’s difficult to squeeze all of the bad ideas in Democrats’ bill into just one floor speech.
“I haven’t mentioned the socialist-style price controls Democrats’ bill would impose on prescription drugs – price controls that would result in fewer new drugs and treatments.
“Or the additional $80 billion – yes, Mr. President, $80 billion – that Democrats’ bill would give to the IRS – the majority of it to boost IRS audits.
“More than $45 billion of that money would go to IRS enforcement.
“$45 billion. Or 57 percent.
“Want to know how much of that $80 billion would go to taxpayer services?
“Mr. President, this is an agency that only succeeded in answering about one out of every 50 taxpayer phone calls during the 2021 tax season.
“And yet Democrats are focused not on improving taxpayer services, but on boosting the number of IRS audits.
“And, Mr. President, no one should be deceived into thinking these increased audits will fall solely on millionaires and billionaires.
“No matter what Democrats – and some officials at the IRS – conveniently claim, the fact of the matter is that it’s exceedingly unlikely that Democrats will be able to collect the revenue they want to collect from increased IRS enforcement without auditing small businesses and ordinary taxpayers.
“In fact, 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.
“Mr. President, almost 18 months ago now, Democrats passed a massive, partisan, $1.9 trillion spending spree.
“Americans are still struggling with the resulting inflation crisis.
“This new tax-and-spending spree is yet another terrible economic idea from Democrats.
“And like the so-called American Rescue Plan before it, it will leave our economy – and the American people – worse off.
“For their sake, I hope Democrats will think better of this bill before it’s too late.
“Mr. President, I yield the floor.”