Democrats Reach Deal To Raise Taxes By Nearly $750 Billion

democrats raise taxes
Manchin: YouTube Screen Shot-CBS News Schumer: Attribution 2.0 Generic (CC BY 2.0)Senate Democrats 10/22/20

If you weren’t hanging onto the contents of your wallet for dear life already, you will be now. On Wednesday, Sens. Joe Manchin (D-WV) and Senate Majority Leader Chuck Schumer (D-NY) reached a deal on a massive tax hike and climate spending bill.

The “deal” comes after Manchin had shot down previous, even larger schemes.

Ludicrously labeled the “Inflation Reduction Act of 2022,” the bill will raise taxes by $739 billion.

Quite a tab to saddle Americans with during a time of 40-year high inflation and a recession.

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What Was Agreed To

A report from The Hill gives some of the particulars of the new bill that will be part of the reconciliation package and brought to the Senate floor next week. It is expected to pass without a single Republican vote.

Of the massive amount of new revenue coming in the door, $369 billion will go right back out for spending on “energy-focused climate programs” over 10 years.

The tax increases, roughly $739 billion over 10 years, will come from “$313 billion through a 15-percent corporate minimum tax, $288 billion from empowering Medicare to negotiate lower drug prices, $124 billion from strong IRS enforcement of tax law and $14 billion from closing the carried interest loophole for money managers.”

In a by-the-way nod to Manchin’s inflation and deficit concerns, $300 billion will allegedly go to reduce the deficit. Manchin once stated that, “I have always said, ‘If I can’t go home and explain it, I can’t vote for it.'” Apparently, he plans to explain it like this:

“It is past time for America to begin paying down our $30 trillion national debt and get serious about the record inflation that is crushing the wages of American workers. In practical terms, the Inflation Reduction Act of 2022 would dedicate hundreds of billions of dollars to deficit reduction by adopting a tax policy that protects small businesses and working-class Americans while ensuring large corporations and the ultra-wealthy pay their fair share in taxes.” 

It’s up to the reader to decide whether or not they believe any funds will actually go to deficit reduction.

Further, tax revenue is already astronomically high.

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Timing Could Not Be Worse

While Americans are already dealing with 9.1% inflation, and the Biden administration continues to grapple with the definition of the word “recession,” CNBC reported on Thursday that the economy contracted for the second straight quarter, from April to June.

Gross Domestic Product (GDP) contracted 0.9%. This follows a similar decline in the first quarter of 2022 by 1.6%.

On top of this, even more money will go from the productive sector of the economy to the government.

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Lack Of Business (Real Life) Experience

The deal agreed on by Manchin and Schumer that will include massive tax increases on Americans at a time when they can ill afford it may have some scratching their heads.

But the Biden administration’s lack of business sense has a simple explanation: Most of them have no business experience.

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A study done by The Committee to Unleash Prosperity’s Stephen More and Jon Decker studied the backgrounds of around 70 Biden administration appointees who oversee economic policy.

The average amount of business experience for Biden administration officials is two and a half years. Compare that to officials in the Trump administration, who had an average of 13 years of business experience. 

It is certainly no stretch to think that Congress is not much better. 

Hang on. The ride is about to get a lot bumpier.

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