Don’t be fooled by the name. While the latest proposal from Senate Democrats to raise taxes and spend more taxpayer money is called the Inflation Reduction Act, it would actually do the opposite. The nonpartisan Joint Committee on Taxation estimates the bill would hurt Americans in every income bracket, with more than half the new taxes being levied on people making less than $400,000 a year. Democrats also want to raise taxes on businesses at a time of negative economic growth and record high inflation.
Under the reconciliation proposal, businesses with more than $1 billion in a new type of book income called “adjusted financial statement income” would be subject to a new minimum tax, which is essentially a tax on manufacturing. If enacted, its effects could be far-reaching. Last year some 200 American companies would have been subject to this tax. Those companies employed around 18 million Americans in 2021.