07.29.22

Democrats Revive Some Of Their Worst Taxing And Spending Spree Policies That Would Cost Americans And Kill Jobs

‘Democrats Have Outlined A Giant Package Of Huge New Job-Killing Tax Hikes, Green New Deal Craziness That Will Kill American Energy, And Prescription Drug Socialism That Will Leave Us With Fewer New Life-Saving Medicines’

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “A few years back, our colleague the senior Senator for West Virginia said, ‘I don’t think [that] during a time of recession, you mess with any of the taxes, or increase any taxes.’ But [Wednesday], Washington Democrats announced they plan to do exactly that. The Democrats who’ve robbed American families once with inflation now want to rob the country a second time through gigantic job-killing tax hikes. Apparently our Democratic colleagues do not want to be responsible for just skyrocketing prices alone. They want Americans to be faced with skyrocketing prices and higher taxes and fewer jobs, all at the same time. Democrats have outlined a giant package of huge new job-killing tax hikes, Green New Deal craziness that will kill American energy, and prescription drug socialism that will leave us with fewer new life-saving medicines. A reckless taxing and spending spree that will delight the far left and hammer working families even harder.” (Sen. McConnell, Remarks, 7/28/2022)

  • LEADER McCONNELL: “Democrats are going all in on a multi-hundred-billion-dollar tax hike on American jobs that experts called the single most economically damaging part of their entire BBB plan from last year. Years of research show the burden would be overwhelmingly passed down to workers. This one tax hike alone would kill tens of thousands of American jobs. Democrats aren’t sticking it to the fat cats. They’re sticking it to the same middle-class families they’ve already crushed with inflation. So Democrats want to respond to their inflation crisis by killing jobs. They also want to respond to a global energy crisis by attacking American natural gas. This reckless taxing and spending spree includes a massive new tax on American natural gas, our country’s single largest source of electricity. When you tax something, you get less of it, and Democrats want new taxes on American natural gas wells, new taxes on American pipelines, and new taxes on American LNG exporting. Higher electricity bills in the summer; higher heating bills in the winter; less reliable energy for our country; and less American energy exported to our allies abroad. Doubling down on inflation. I’ve only scratched the surface of all the ways Democrats want to pick Americans’ pockets. They want to pour new funding into IRS agents so Americans end up with more audits. IRS agents get new computers and smartphones so that American small businesses get more audits. Democrats also want to drain money out of medical innovation and leave terminally ill Americans with fewer new treatments and cures as a result. The experts say this big government money-grab will literally cost Americans their lives. Remember, Democrats say all these historic tax hikes are their answer to the inflation they themselves caused. Did you hear that, America? Democrats’ answer to hurting you once is to hurt you again. Democrats say the response to Democrat inflation is Democrat tax hikes. It wasn’t enough that Democrats have already destroyed your family’s purchasing power. Now they want to kill your job and tax your electricity, too.” (Sen. McConnell, Remarks, 7/28/2022)

 

Democrats Are Imposing A New Tax On Natural Gas, Which Would Cost Americans Even More On Their Already Skyrocketing Energy Bills And Could Cost 100,000 Jobs As Well

LEADER McCONNELL: “[Democrats] want to respond to a global energy crisis by attacking American natural gas. This reckless taxing and spending spree includes a massive new tax on American natural gas, our country’s single largest source of electricity. When you tax something, you get less of it, and Democrats want new taxes on American natural gas wells, new taxes on American pipelines, and new taxes on American LNG exporting. Higher electricity bills in the summer; higher heating bills in the winter; less reliable energy for our country; and less American energy exported to our allies abroad. Doubling down on inflation.” (Sen. McConnell, Remarks, 7/28/2022)

“The program would put a fee on excess methane emissions — rising to $1,500 per metric ton by 2026…” (“Manchin Revives Climate Deal: What’s In The $369B Bill,” E&E News, 7/28/2022)

AMERICAN GAS ASSOCIATION: “On behalf of the companies and associations that make up the natural gas supply chain and the 180 million Americans and the 5.5 million businesses that rely on natural gas, we would like to express our concerns about including a methane emissions fee or tax in budget reconciliation legislation…. New fees or taxes on energy companies will raise costs for customers, creating a burden that will fall most heavily on lower-income Americans…. [B]ased on similar proposals introduced earlier this Congress, we estimate that the fee could amount to tens of billions of dollars annually. These major new costs most likely will result in higher bills for natural gas customers, including families, small businesses, and power generators…. Any increase in low-income households’ energy costs could prove devastating.” (American Gas Association and 27 Natural gas Supply Chain Associations, Letter to Sens. Schumer and McConnell, Speaker Pelosi, and Rep. McCarthy, 9/07/2021)

Americans Rely On Natural Gas For Affordable Energy And Would See Their Energy Bills Rise Once Democrats Slap A New Tax On Natural Gas

According to the Energy Information Administration, more electricity in the United States is generated by natural gas than any other source. (“What Is U.S. Electricity Generation By Energy Source?,” EIA Website, Accessed 7/28/2022)

Among the 20 states that use the most natural gas are Pennsylvania, Florida, Ohio, Georgia, Wisconsin, North Carolina, Colorado, and Arizona. (“Primary Energy Consumption Estimates by Source, Ranked by State, 2020,” EIA Website, Accessed 7/28/2022)

Democrats’ Inflation Has Already Increased Prices For Natural Gas By Almost 40%

In June natural gas prices (Utility [piped] gas service) increased 38.5% year-on-year, the largest increase since 2005. (Bureau of Labor Statistics, Accessed 7/28/2022)

 

Democrats Would ‘Roughly Double’ The Size Of The IRS To Send A Swarm Of Agents After Middle Class Americans And Small Businesses

“The IRS money, about $80 billion over a decade, would roughly double the size of the agency and be aimed at tougher enforcement …” (“Joe Manchin Reaches Deal With Chuck Schumer on Energy, Healthcare, Tax Package,” The Wall Street Journal, 7/28/2022)

SEN. MIKE CRAPO (R-ID), Senate Finance Committee Ranking Member: “What we’ve found from the Joint Committee on Taxation is that the vast majority of those dollars will come from the middle class, the very group that the president and Democrats say will not be targeted. The President continues to pledge that no one making less than $400,000 will see a penny in tax increases, but the JCT shows that of the ‘tax gap’ the IRS dollars would go toward collecting—78-90 percent of that tax gap falls on income below $200,000. The IRS cannot generate the money that the Democrats claim they will from this funding, unless it focuses the target right on the middle class.  That’s what the data shows, and what they don’t want to say.  This supersized IRS will create an army of auditors to come out and go after the tax gap, which lies primarily in income categories under $400,000.” (Sen. Crapo, Press Conference, 12/14/2021)

SEN. SHELLEY MOORE CAPITO (R-WV): “When you look at small businesses, we have 113,000 small businesses in West Virginia that would be impacted by this…the invasion of privacy into individuals and small businesses is something that we hear about every day, and I think would devastate our economies. And think of the cost that this is going to be to small businesses. Not only just being audited, but the time and energy and money it takes to answer…When you saw the average amount of recouped tax in some of the smaller businesses in some of the lower incomes, it's $20, $25. It's going to cost them thousands of dollars to be able to answer this.” (Sen. Capito, Press Conference, 12/14/2021)

 

Democrats Are Slapping A New Tax Increase On American Companies That Could Result In The Loss Of Tens Of Thousands Of Jobs As They Struggle With Inflation And International Competition

“The biggest revenue-raiser in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits…. The new corporate minimum tax would kick in after the 2022 tax year and raise some $313 billion over the decade.” (The Associated Press, 7/28/2022)

THE WALL STREET JOURNAL EDITORIAL BOARD: “Start with the 15% minimum tax on corporate book income over $1 billion, which Democrats claim will raise $313 billion through 2031. This new alternative minimum tax will slam businesses whose taxable income is lower than the profits on their financial statements owing to the likes of investment expensing, tax credits and business deductions. Many companies pay less than the 21% corporate tax rate because they can expense investments under the tax code up-front. Hence, the new tax will increase the cost of business investment and—irony alert—the Tax Foundation forecasts the coal industry would be hardest hit. Yet green-energy tax credits would be exempt from the new tax.” (Editorial, “The Schumer-Manchin Tax and Subsidy Pact,” The Wall Street Journal, 7/28/2022)

In December, The Tax Foundation Called This Tax Hike ‘The Most Economically Damaging Provision’ Of Democrats’ Reckless Taxing And Spending Plan, Since It Is Expected To Cost Tens Of Thousands Of Jobs

TAX FOUNDATION: “The proposed 15 percent minimum tax on corporate book income is the most economically damaging provision in the bill, reducing GDP by 0.1 percent and costing about 27,000 jobs.” (“House Build Back Better Act: Details & Analysis of Tax Provisions in the Budget Reconciliation Bill,” Tax Foundation, 12/02/2021)

An Analysis By The Nonpartisan Joint Committee On Taxation Finds This Tax Hike ‘Would Overwhelmingly Hit U.S. Manufacturers’

“A new analysis by the nonpartisan Joint Committee on Taxation (JCT) of the book minimum tax proposal in the latest version of the Democrats’ reckless tax-and-spend bill (the 15 percent minimum tax on corporations) would overwhelmingly hit U.S. manufacturers at a time when they can least afford it…. Democrats claim the book minimum tax is a tax loophole closer, when in reality it is a tax on U.S. manufacturers.  Based on the new JCT analysis, 49.7 percent of the tax would be borne by the manufacturing industry at a time when manufacturers are already struggling with inflation, supply-chain disruptions, and an impending recession. Despite Democrats’ claims, the book minimum tax does not close tax loopholes. Tax and book treatment of capital investments, like those made by American manufacturers, differ for book and tax purposes – for good reason.  Congress intentionally designed tax depreciation rules to support domestic investment.  Democrats’ tax on U.S. manufacturing would eliminate that benefit.” (U.S. Senate Finance Committee Ranking Member, Press Release, 7/28/2022)

SEN. MIKE CRAPO (R-ID), Senate Finance Committee Ranking Member: “The JCT confirmed what we have been saying for over a year: this fundamentally flawed proposal, which has not been properly vetted by either Congressional tax-writing committee, risks severely harming American manufacturers, exacerbating supply-chain disruptions, and ultimately costing U.S. jobs and investment. This is a domestic manufacturing tax, plain and simple. Now is not the time to resurrect a harmful policy that would overwhelmingly hit American manufacturers and supply chains, as well as undercut critical research and development and investment in emerging technologies.” (U.S. Senate Finance Committee Ranking Member, Press Release, 7/28/2022)

NATIONAL ASSOCIATION OF MANUFACTURERS President and CEO Jay Timmons: “This proposal is nothing more than a repackaging of the same bad ideas with a new name slapped on it. It is especially harmful because it will undermine manufacturers’ competitiveness at a time when the industry is reeling from supply chain disruptions and record inflation. Manufacturers kept our promises after the 2017 tax reforms, hiring more workers, investing in our communities and raising wages and benefits. Raising taxes now will hurt manufacturers’ ability to keep delivering for our people and mean fewer opportunities for Americans already worried about their financial future.” (National Association of Manufacturers, Press Release, 7/27/2022)

A Separate Tax Foundation Analysis Last Year Found That This Tax Increase Would Also Heavily Impact Utilities And The Coal Industry In Particular, Likely Driving Up Americans’ Utility Bills At A Time They Can Least Afford It

TAX FOUNDATION: “[T]he burden of this tax is not spread evenly across industries…. As a share of its income, the coal industry faces the heaviest burden of the book minimum tax, facing a net tax hike of 7.2 percent of its pretax book income, followed by automobile and truck manufacturing, which faces a 5.1 percent tax hike. In dollar terms, the industries that would account for the largest book minimum tax liabilities are utilities, at $43.3 billion, followed by communication at $30.6 billion.” (“Who Gets Hit by the Book Minimum Tax?,” Tax Foundation, 11/18/2021)

 

Democrats Would Impose Socialist Price Controls On Our Pharmaceutical Industry, Which Would Result In Fewer Live-Saving Medications

LEADER McCONNELL: “The entire world benefits from our genius, but in particular, the American people get first and fastest access to the latest new treatments, cures, and medical marvels. But the Democrats’ pursuit of prescription drug socialism could put all of it at risk. Arbitrary, top-down government price controls would dry out the wells of American innovation to the tune of hundreds of billions of dollars in lost research and development. And American patients would feel the pain. The cost of breakthrough cures is measured in dollars, but the cost of neglecting them would be measured in lost years of American life.  One academic analysis pegged that true cost at a cumulative 331.5 million years. Let me say that again. One expert says the negative effects of Democrats’ proposal on medical research would cost a collective total of 331.5 million cumulative years of life. In other words, their proposal would eventually destroy as many years of Americans’ lives as there are Americans to live them.” (Sen. McConnell, Remarks, 7/25/2022)

UNIVERSITY OF CHICAGO STUDY: “This issue brief reviews the evidence-base to assess the impact of HR 5376 on drug innovation and patient health. A large academic literature estimates the effect of future drug revenues on R&D spending and finds that on average that a 1 percent reduction in revenue leads to a 1.5 percent reduction in R&D activity. We find that HR 5376 will reduce revenues by 12.0 percent through 2039 and therefore that the evidence base predicts that R&D spending will fall about 18.5 percent, amounting to $663 billion. We find that this cut in R&D activity leads to 135 fewer new drugs. This drop in new drugs is predicted to generate a loss of 331.5 million life years in the US, 31 times as large as the 10.7 million life years lost from COVID-19 in the US to date. These estimated effects on the number of new drugs brought to market are 27 times larger than projected by CBO, which finds only 5 drugs will be lost through 2039, equaling a 0.63 percent reduction.” (Tomas J. Philipson And Troy Durie, “Issue Brief: The Impact Of HR 5376 On Biopharmaceutical Innovation And Patient Health,” The University Of Chicago, 11/29/2021)

NATIONAL ASSOCIATION OF MANUFACTURERS President and CEO Jay Timmons: “Government price controls on pharmaceutical manufacturers are no less destructive. They will weaken our ongoing work to develop lifesaving cures to complex diseases like cancer and Alzheimer’s and harm our responses to health crises. It’s bad for Americans’ health. It’s wrong for our economy.” (National Association of Manufacturers, Press Release, 7/27/2022)

THE WALL STREET JOURNAL EDITORIAL BOARD: “The Schumer-Manchin deal is also a raid on drug companies. The bill will require the Health and Human Services Secretary to ‘negotiate’ Medicare prices—i.e., impose price controls—for dozens of drugs. But the $288 billion in putative savings are fanciful. Manufacturers will hedge potential future losses by launching drugs at higher prices. Generic manufacturers say price controls will dampen their incentive to develop copycats, which will result in higher prices for all drugs down the road. The bill will also discourage investment in innovative treatments that could reduce future healthcare spending.” (Editorial, “The Schumer-Manchin Tax and Subsidy Pact,” The Wall Street Journal, 7/28/2022)

  • “There is no negotiation when the government points a gun at your head. The deal would slap companies with a 95% excise tax on their sales if the government claims they aren’t negotiating in good faith. Drug makers won’t even be able to challenge the government price control—deemed the ‘maximum fair price’—in an administrative appeal or court. This drug-pricing non-fix would cause prices to rise faster by discouraging development of new generics. Medicare’s negotiated prices also won’t apply to privately insured patients. They will likely get stuck paying higher prices to offset the so-called savings that drug makers would be required to give Medicare, which will go toward subsidizing green-energy. Worse, the deal would discourage investment in new treatments. Which would most Americans rather have: more life-saving treatments or rooftop solar panels? The first rule of medicine is do no harm. The same should go for legislation.” (Editorial, “A Price That Isn’t Soaring: Prescription Drugs”, The Wall Street Journal, 7/14/2022)

 

Democrats Plan To Hand Out Tax Credits For Electric Vehicles That Cost More Than The Median American Household Makes In A Year To Wealthier Households That Make As Much As $300,000 Per Year

LEADER McCONNELL: “[Democrats] want these job-killing tax hikes so they can spend tens of billions of dollars on slush funds for ‘green banks’ and ‘environmental justice.’ They want job-killing tax hikes so they can finance new handouts for wealthy households earning up to $300,000 a year to buy an $80,000 electric car. Democrats want to subsidize rich people buying electric cars that cost more than the median American household earns in an entire year.” (Sen. McConnell, Remarks, 7/28/2022)

“The proposed bill includes a $7,500 federal tax credit for some buyers of electric vehicles, extending an incentive that has been in place for more than a decade for plug-in models. It also includes a new $4,000 tax credit for the purchase of used electric vehicles. Both new and used cars must be sold at registered dealerships to qualify. … The proposed bill would exclude buyers of electric cars priced higher than $55,000 and electric trucks, vans and SUVs above $80,000. It also would include income restrictions: Buyers with household incomes of $150,000 or higher—$300,000 for married couples—wouldn’t qualify for the credit on new EV purchases. The limits on used purchases are $75,000 for individuals and $150,000 for married couples on qualifying used vehicles.” (“Tesla, GM, Other EV Makers Get Potential Win in Senate Deal,” The Wall Street Journal, 7/28/2022)

  • PAGES 366-377: “SEC. 13401. CLEAN VEHICLE CREDIT. (a) PER VEHICLE DOLLAR LIMITATION.—Section 30D(b) is amended by striking paragraphs (2) and (3) and inserting the following: (2) CRITICAL MINERALS.—In the case of a vehicle with respect to which the requirement described in subsection (e)(1)(A) is satisfied, the amount determined under this paragraph is $3,750. (3) BATTERY COMPONENTS.—In the case of a vehicle with respect to which the requirement described in subsection (e)(2)(A) is satisfied, the amount determined under this paragraph is $3,750. … (10) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.— (A) IN GENERAL.—No credit shall be allowed under subsection (a) for any taxable year if— (i) the lesser of—(I) the modified adjusted gross income of the taxpayer for such taxable year, or (II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds (ii) the threshold amount. (B) THRESHOLD AMOUNT.—For purposes of subparagraph (A)(ii), the threshold amount shall be— (i) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $300,000, (ii) in the case of a head of household (as defined in section 2(b)), $225,000, and (iii) in the case of a taxpayer not described in clause (i) or (ii), $150,000. (C) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this paragraph, the term ‘modified adjusted gross income’ means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933. (11) MANUFACTURER’S SUGGESTED RETAIL PRICE LIMITATION.—(A) IN GENERAL.—No credit shall be allowed under subsection (a) for a vehicle with a manufacturer’s suggested retail price in excess of the applicable limitation. (B) APPLICABLE LIMITATION.—For purposes of subparagraph (A), the applicable limitation for each vehicle classification is as follows: (i) VANS.—In the case of a van, $80,000. (ii) SPORT UTILITY VEHICLES.—In the case of a sport utility vehicle, $80,000. (iii) PICKUP TRUCKS.—In the case of a pickup truck, $80,000. (iv) OTHER.—In the case of any other vehicle, $55,000.” (H. R. 5376, pp 366-377)

According to the U.S. Census Bureau, the median household income is $64,994. (U.S. Census Bureau, Accessed 7/28/2022)

President Biden Called The Electric Vehicle Tax Breaks For The Wealthy ‘Environmental Justice’

PRESIDENT BIDEN: “It also gives consumers a tax credit to buy any electric vehicle or fuel cell vehicle, new or used, and a tax credit for up to $7,500 if those vehicles were made in America. This investment in environmental justice is real.” (President Biden, Remarks, 7/28/2022)

 

Democrats Would Also Spend Billions Of Dollars On A Slush Fund ‘Meant To Fund A National Green Bank’

“The agreement also includes a total of $27 billion toward a clean energy technology accelerator to support deployment of emission-reduction technologies, especially in disadvantaged communities, according to a summary. The program resembles the national green bank that had emerged in earlier iterations of the bill and has been championed by environmental advocates.” (“What's In The Democrats' Climate And Energy Legislation,” Politico, 7/28/2022)

PAGES 658-660: “SEC. 134. GREENHOUSE GAS REDUCTION FUND. (a) APPROPRIATIONS.—(1) ZERO-EMISSION TECHNOLOGIES.—In addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $7,000,000,000… (2) GENERAL ASSISTANCE.—In addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $11,970,000,000… (3) LOW-INCOME AND DISADVANTAGED COM MUNITIES.—In addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $8,000,000,000… (4) ADMINISTRATIVE COSTS.—In addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $30,000,000…” (H. R. 5376, pp 658-660)

  • “(2) INDIRECT INVESTMENT.—The eligible recipient shall provide funding and technical assistance to establish new or support existing public, quasi-public, not-for-profit, or nonprofit entities that provide financial assistance to qualified projects at the State, local, territorial, or Tribal level or in the District of Columbia, including community- and low-income-focused lenders and capital providers.” (H. R. 5376, p 660)

 

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SENATE REPUBLICAN COMMUNICATIONS CENTER

Related Issues: Economy, Green New Deal, Taxes, Coal, Middle Class, Senate Democrats, Health Care, Democrats' Reckless Taxing And Spending Spree, Jobs, IRS, Energy, Small Business