(The opinions expressed in guest op-eds are those of the writer and do not necessarily represent the views of RedState.com.)
Unfortunately, it seems like a fait accompli that the Inflation Reduction Act will be passed by the U.S. House of Representatives and signed into law by President Biden within the next few days.
For most Americans, the so-called Inflation Reduction Act (IRA) will do little, if anything, to make their lives better. It will not reduce inflation. It will not increase economic growth. It will not incubate innovation and entrepreneurship. It will not reduce hard-working Americans’ tax burden. It will not decrease the red tape that is sapping the vigor from the U.S. economy. It will not decrease the annual deficit nor the national debt. It will not spur job creation. It will not lead to higher wages for everyday Americans. It will not make gasoline, food, housing, or any items of significance more affordable.
On the other hand, the IRA has many benefits for those who are fans of bigger government.
For starters, the bill will increase the size of the Internal Revenue Service’s (IRS) budget six-fold. This includes the addition of 87,000 new IRS agents, who will be tasked with increasing tax enforcement via more audits of small businesses and self-employed Americans.
Currently, the IRS has 93,654 employees. So, in one fell swoop, Congress is seeking to almost double the workforce of one of the most-feared departments of the federal government.
According to the bill’s text, “Nothing in this section is intended to increase taxes on any taxpayer or small business with a taxable income below $400,000. Further, nothing in this section is intended to increase taxes on any taxpayer not in the top 1%.”
Pay particular attention to the phrase “is intended to,” which is repeated twice. There is a reason the bill’s authors chose “is intended to” instead of “shall.”
Per IRS data, Americans earning more than $400,000 annually constitute 1.8 percent of all taxpayers, although they are responsible for about 25 percent of the nation’s income tax revenue. Those making less than $400,000 per year (98.2 percent of taxpayers) pay the vast majority of the nation’s income taxes—75 percent of the total burden.
As The Wall Street Journal points out, “The Joint Committee on Taxation, Congress’s official tax scorekeeper, says that from 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year. Only 4% to 9% would come from those making more than $500,000.”
The bill is also a boon for the administrative state, especially the Environmental Protection Agency (EPA). Under the bill, the EPA will receive $41.5 billion in new funds, which will be allocated towards fighting climate change and pursuing nebulous climate and environmental justice initiatives.
For instance, “The Environmental and Climate Justice Block Grants, funded at $3 billion, invest in community led projects in disadvantaged communities and community capacity building centers to address disproportionate environmental and public health harms related to pollution and climate change.” How does that reduce inflation?
Furthermore, the bill expands the federal government’s role in health care by extending Obamacare subsidies and allowing the government to set price controls for drugs covered under Medicare.
By no means is this a comprehensive list of all the ways in which the Inflation Reduction Act will increase the size and scope of government. In fact, it is just the tip of the iceberg. The bill also includes hundreds of billions of dollars in crony capitalist subsidies for electric vehicles and all sorts of other renewable energy boondoggles.
In reality, and this cannot be stressed enough, the Inflation Reduction Act is not designed to reduce inflation. It is nothing more than yet another gargantuan spending bill sought by the Biden administration and congressional Democrats with the aim of increasing the power of the federal government, breeding more dependence upon the federal government, and instilling fear among those of us who would dare defy the federal government.
Chris Talgo ([email protected]) is senior editor at The Heartland Institute.