I thought you might be interested in the Congressional Budget Office’s analysis (PDF) of H. R. 5376, the “Inflation Reduction Act of 2022”, a cognomen worthy of P. T. Barnum. As I read the tables of information, like many act of Congress the spending is mostly front-loaded (take place in the first years) while the revenue is backloaded (takes place later). Their answers to Lindsey Graham’s questions (also PDF) are even more interesting:
Is the United States Currently in a Recession?
They say: ¡Quién sabe!
How Would Enacting the Bill Affect Inflation in 2022 and 2023?
They say:
In calendar year 2022, enacting the bill would have a negligible effect on inflation, in CBO’s assessment. In calendar year 2023, inflation would probably be between 0.1 percentage point lower and 0.1 percentage point higher under the bill than it would be under current law, CBO estimates.
Penn-Wharton’s assessment was that the affect on inflation would be immeasurably small.
What Is the Highest Amount of Income That People Qualifying for
Expanded Health Insurance Subsidies Would Earn?
They say:
- A 64-year-old would receive a premium tax credit if his or her income did not exceed $163,700 in that year.
- A 21-year-old would receive a premium tax credit if his or her income did not exceed $54,600.
- A family of four consisting of individuals ages 50, 50, 21, and 21 would receive a premium tax credit if their household income was
no greater than $304,100.- A younger family of four, consisting of people ages 24, 24, 5, and 5, would receive a premium tax credit if the household’s income was no more than $192,700.
- What Effect Would a New Alternative Minimum Tax on Corporations Have on Business Investment and GDP?
What Effect Would a New Alternative Minimum Tax on Corporations Have on Business Investment and GDP?
They say:
In CBO’s assessment, the proposed new corporate minimum tax would reduce the incentive for those large corporations to invest, primarily by limiting the tax benefit of accelerated depreciation and by decreasing the after-tax return on their new investment.
Given those assessments what would be a better name for the bill? I’m taking suggestions.
TJMPP Bill. The Joe Manchin Pipeline Payoff Bill. I watched an interview of Manchin by someone who was well prepared and asked about several of the points you cited. His response really came down to “that’s a lie.” It was truly pathetic.
Manchin kept up the charade about no one making less than $400K paying more taxes. Manchin knows better. He lies. But it continues to amaze me how illiterate Americans are on corporate matters. A publicly traded corporation is simply a pile of papers generally filed in Delaware. Full stop. A stack of paper pays no taxes. Depending on various market factors it allocates the tax to its constituencies:
employees, investors and customers. Perhaps suppliers, but not much. Most make less than $400K.
Further, for smaller, closely held corporations a tax increase is really born by an individual, or a small group of individuals. They do the same thing large corporations do in trying to pass it along, like any other cost. To the degree it is born by investors, most make less than $400K.
Its a straight tax and spend bill, what Washington does best. It will affect inflation immaterially, short or long term. In fact, its probably really designed to prop up consumption ahead of recession.
And Joe Manchin is a typical Washington whore.
The bill isn’t entirely bad, but this is what you get when the Senate and Congress ignore regular order and two Senators (Schumer and Manchin) essentially write a bill in secret and then present it as a fait accompli, take it or leave it option.
The Inflation Reduction Act aka “The Build Back Better Redux Act.â€
Well, I would say the “Inflation Reduction Act” is going through regular order. Reconciliation is part of Senate rules / law. And the bill reflects the purpose of reconciliation. Reconciliation is meant to be a powerful tool on fiscal matters (taxes, overall spending levels excluding social security / Medicare, debt); but designed to have limited effects on non-fiscal matters.
That’s why the bill seems odd, Democrats are trying it primarily to enact non-fiscal policy.
Curious,
By “regular order,” I mean the normal practice of crafting legislation through committees and not by two senators in secret.
We don’t have a parliamentary system but in recent years Congress and the Senate leadership sure act like we do.