Tax Foundation Reports “Inflation Reduction Act” Kills Jobs

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New research from the Tax Foundation reveals that the measure may actually cost tens of thousands of Americans their jobs. Democrats are promoting their most recent social spending bill as a cure-all for the struggling economy as it battles debilitating inflation.

The plan, according to research from the Tax Foundation, a nonpartisan organization that promotes lower taxes, may result in the loss of 30,000 full-time jobs in the American economy. Over time, it would also lower the typical after-tax income for taxpayers in every income band.

The report stated that by limiting the economy’s productive capacity, the law may actually aggravate inflation by lowering long-term economic growth.

Table 1. Combined Long-Run Effects of the Inflation Reduction Act Tax Provisions

Gross Domestic Product (GDP) -0.10%
Gross National Product (GNP) Less than +0.05%
Capital Stock -0.30%
Wage Rate -0.10%
Full-Time Equivalent Jobs -30,000

The proposal, rebranded by Democrats as the Inflation Reduction Act of 2022, would raise an estimated $739 billion over the following ten years by increasing IRS funding, enacting a 15 percent minimum corporate tax targeted at companies’ book income, allowing Medicare to bargain for lower prescription drug costs, and closing a well-known tax loophole utilized by private equity and hedge fund managers.

The proposals’ tax revenues would be used to fund programs aimed at halting global warming, bringing down drug prices, and lowering the country’s $30 trillion debt. It includes $433 billion of additional spending, while $300 billion of the additional money would be used to reduce the national deficit.

“The American people have been waiting for this to happen. This tackles current issues like general inflation and excessive healthcare expenses as well as future energy security initiatives “27 July, according to Biden’s statement.

Before taking into consideration the additional tax credits for individuals and corporations, the Tax Foundation analysis found that the spending measure might generate around $656 billion over the following ten years. When those are taken into account, the proposal would boost the country’s coffers by around $304 billion between 2022 and 2031.

Despite this, the measure would only slightly boost household income over the following ten years, or 0.05 percent, on the overall economy. Additionally, the proposal would decrease salaries by roughly 0.1 percent and the capital stock by about 0.3 percent.

According to researchers at the Tax Foundation, the bill’s 15 percent minimum tax on book income is the “most harmful” tax provision: That tax would result in a 0.3% drop in GDP, the country’s broadest measure of goods and services generated, and a 0.1% drop in wages. An extra 23,000 jobs would be lost to the economy as a result of the corporate tax rise.

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According to researchers at the Tax Foundation, the bill’s 15 percent minimum tax on book income is the “most harmful” tax provision: That tax would result in a 0.3% drop in GDP, the country’s broadest measure of goods and services generated, and a 0.1% drop in wages. An extra 23,000 jobs would be lost to the economy as a result of the corporate tax rise.

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