Reality Check: What Biden’s Reckless Taxing And Spending Spree Will And Won’t Do

Democrats’ Reckless Taxing And Spending Spree Won’t Reduce Inflation

THE ASSOCIATED PRESS: “With inflation raging near its highest level in four decades, the House on Friday gave final approval to President Joe Biden’s landmark Inflation Reduction Act. Its title raises a tantalizing question: Will the measure actually tame the price spikes that have inflicted hardships on American households? Economic analyses of the proposal suggest that the answer is likely no — not anytime soon, anyway. The legislation, which the Senate passed earlier this week and now heads to the White House for Biden’s signature, won’t directly address some of the main drivers of surging prices — from gas and food to rents and restaurant meals.” (“Inflation Reduction Act May Have Little Impact On Inflation,” The Associated Press, 8/12/2022)

• “The nonpartisan Congressional Budget Office concluded last week that the changes would have a ‘negligible’ impact on inflation this year and next. And the University of Pennsylvania’s Penn Wharton Budget Model concluded that, over the next decade, ‘the impact on inflation is statistically indistinguishable from zero.’” (“Inflation Reduction Act May Have Little Impact On Inflation,” The Associated Press, 8/12/2022)

Not Only Will The Bill Do Nothing To Reduce Inflation, ‘The Law’s Health Care Subsidies Could Send Inflation Up’

“In addition, Kent Smetters, director of the Penn Wharton Budget Model, said the law’s health care subsidies could send inflation up. The legislation would spend $70 billion over a decade to extend tax credits to help 13 million Americans pay for health insurance under the Affordable Care Act.” (“Inflation Reduction Act May Have Little Impact On Inflation,” The Associated Press, 8/12/2022)

But It Will Raise Your Taxes

“Biden vowed never to raise taxes on any Americans making less than $400,000 annually. Yet according to the Joint Committee on Taxation, the Schumer-Manchin bill does just that. Up to $16.7 billion worth of tax increases, JCT estimates.” (Punchbowl News AM, 8/01/2022)

According to the Joint Committee on Taxation, Democrats’ reckless taxing and spending bill would raise nearly $17 billion in taxes from Americans earning less than $200,000. (U.S. Senate Finance Committee Ranking Member, Press Release, 7/30/2022)

• More than half of all new tax revenue from the reckless taxing and spending bill comes from Americans earning under $500,000. (U.S. Senate Finance Committee Ranking Member, Press Release, 7/30/2022)

THE WALL STREET JOURNAL EDITORIAL BOARD: “One well-known economic truth is that corporations don’t really pay taxes. They are essentially tax collectors, as the corporate tax rate ultimately falls on some combination of workers, shareholders and customers. Raise the corporate tax rate, and you’re cutting wages and salaries for workers. No surprise, that’s exactly what the Joint Committee on Taxation found in its analysis of the Schumer-Manchin bill’s distributional impact. The JCT finds that average tax rates will increase for nearly every income category in 2023 under the bill. Taxes will rise by $16.7 billion in 2023 on Americans earning less than $200,000 a year. Taxpayers earning between $200,000 and $500,000 will pay $14.1 billion more. This gives the lie to Democratic claims that no one earning under $400,000 will pay more taxes under the bill, a promise Mr. Biden also made in his campaign. The reality is that the Schumer-Manchin bill is a tax increase on nearly every American.” (Editorial, “The Schumer-Manchin Tax Increase on Everyone,” The Wall Street Journal, 7/31/2022)

Democrats Are Giddy About Slapping Tax Hikes On Manufacturers And The Oil And Gas Industry …

“Manufacturers and other companies making capital investments could pay the bulk of the new corporate minimum tax in Senate Democrats’ fast-moving fiscal legislation, according to an analysis of the plan. The 15% minimum tax would take effect next year and apply to U.S.-based companies that report financial-statement profits averaging at least $1 billion over three years, according to legislation released this week that mirrors a House-passed bill from last year. The proposal, if it becomes law, would raise companies’ tax bills until they hit that minimum rate.” (“Democrats’ Corporate Tax Plan Threatens Higher Bills for Manufacturers,” The Wall Street Journal, 7/30/2022)

• “But much of the money would likely come from companies that report low tax rates now because their capital investments—in factories and machines, for example—are treated differently in tax and financial accounting…. Nearly half of the revenue would come from manufacturers, the committee said, using a broad definition that might include some pharmaceutical and technology companies. For accounting purposes, deductions for capital investments are spread over the life of the asset. For tax purposes, they are often accelerated, reducing current tax rates. The proposal … would largely erase that difference for affected companies, raising their taxes now and deferring or denying the benefit of accelerated depreciation. An analysis from the Tax Foundation, which favors simpler tax systems with lower rates, found that the coal, automobile and utilities industries would face larger tax bills.” (“Democrats’ Corporate Tax Plan Threatens Higher Bills for Manufacturers,” The Wall Street Journal, 7/30/2022)

“The climate and tax spending deal announced last week by Senate Majority Leader Chuck Schumer and Senator Joe Manchin could cost the oil industry $25 billion in new taxes. The legislation, which may get a Senate vote as soon as next week, would reinstate and increase a long-lapsed tax on crude and imported petroleum products to 16.4 cents per gallon, according to a summary of the plan released Sunday by the Senate’s tax-writing committee. … The Superfund tax, which previously stood at 9.7 cents per barrel until it lapsed at the end of 1995, is paid by refiners and other importers to help fund the clean-up of hazardous waste sites. In addition to increasing the tax, the Senate proposal would index the fee to inflation.” (“Manchin Spending Deal Includes Billions in Taxes on Oil Sector,” Bloomberg, 7/31/2022)

“The 725-page bill released last week would also impose other costs for the oil and gas industry. It places a new first-time fee on methane emissions rising to as much as $1,500 a ton and increases the royalty rate companies pay to the government for oil and gas produced on federal land.” (“Manchin Spending Deal Includes Billions in Taxes on Oil Sector,” Bloomberg, 7/31/2022)

… But American Families Will Pay The Price

AMERICANS FOR TAX REFORM: “Democrats’ reckless tax and spend spree endorsed by Sen. Joe Manchin (D-W.Va.) includes a $12 billion tax on crude oil that will be paid by consumers in the form of higher gas and energy costs…. As if it weren’t bad enough, Democrats have pegged their tax increase to inflation. As inflation increases, so will the level of tax…. This tax hike is a clear violation of President Biden’s pledge not to raise any form of tax on anyone making less than $400,000 per year.” (“Manchin-Schumer Bill Includes $12 Billion Crude Oil Tax,” Americans for Tax Reform Website, 8/01/2022)

• “The legislation would impose a regressive tax on oil and gas development based upon emission levels of methane during production, leading to higher energy bills for consumers and higher costs of everyday products.” (“5 Tax Hikes in Dem Reconciliation Bill,” Americans for Tax Reform Website, 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)

• “We also estimate that the proposal could put more than 100,000 American jobs at risk…. We also anticipate that natural gas producing regions would bear a severely disproportionate economic impact—including lost jobs—as businesses across the natural gas value chain are harmed by new, government-imposed costs and inflated natural gas prices.” (American Gas Association and 27 Natural gas Supply Chain Associations, Letter to Sens. Schumer and McConnell, Speaker Pelosi, and Rep. McCarthy, 9/07/2021)

• “These outcomes are inconsistent with President Biden’s commitment to pay for reconciliation without imposing new taxes on lower-income Americans.” (American Gas Association and 27 Natural gas Supply Chain Associations, Letter to Sens. Schumer and McConnell, Speaker Pelosi, and Rep. McCarthy, 9/07/2021)

It Won’t Improve Your Health Care

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

SEN. ROGER MARSHALL (R-KS): “Rather than a healthcare system that offers Americans breakthrough medicines, this reckless tax and spend bill will force Americans to settle for end-of-life care. That’s wrong. As a physician who practiced medicine for more than 25 years, I will not let that happen without a fight. Having the best tools and medicine to treat patients helps physicians achieve our mission of keeping patients happy, healthy, and at home with their loved ones. When Congress created the Medicare Part D program, there was wisdom in this body that certain patient populations should be protected. And with continued congressional support, this policy has remained. We know government price controls on life-saving medicine will kill innovation. My colleagues across the aisle need to recognize the basic economics that allows the U.S. pharmaceutical industry to be the best in the world. If Congress eliminates incentives for an industry with a 95-100 percent fail rate in cancer drugs, we’ll never get a cure. Americans deserve better. I urge my colleague to abandon this poorly constructed scheme and tackle drug pricing with bipartisan, long-lasting solutions.” (Sen. Marshall, Press Release, 8/07/2022)

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)

‘This Bill Will Decimate The Hope Of Curing Cancer And Other Deadly Diseases’

“‘This bill will decimate the hope of curing cancer and other deadly diseases,’ Stephen Ubl, president and chief executive officer of PhRMA … said at a forum on [July 27^th]. Faced with dwindling returns, drug companies would lack incentives to seek new uses for approved drugs, Ubl said. He added that ‘negotiating’ is a misnomer in the bill, because the ‘deck is stacked’ in the government’s favor with a proposed tax on the sale of medicine if manufacturers refused the government’s price. Michelle McMurry-Heath, president and chief executive of the Biotechnology Innovation Organization, said in a news release this month the legislation ‘could propel us light-years back into the dark ages of biomedical research.’” (The Washington Post, 7/28/2022)

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)

A University Of Chicago Study Of Democrats’ Plan Found That They Would Result In Hundreds Of Millions Of Lost Years Of Life And Significantly Fewer Innovative Medications

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)

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)

But It Will Send An Army Of IRS Agents After You

Senate Democrats REFUSED To Ensure Their New IRS Dragnet Won’t Sweep Up Lower And Middle Income Taxpayers

SEN. MIKE CRAPO (R-ID), Senate Finance Committee Ranking Member: “It’s clear that the President, the IRS, and the Secretary of Treasury are scrambling to protest that they are not going to increase audits on people making less than $400,000.  However, when given the opportunity to vote on the Senate floor and put into binding statute that increased funds could not be used to increase audits on those making less than $400,000 per year, every single Democratic senator voted no.  When I offered my amendment to simply make it clear that the $80 billion being given to the IRS--six times its current annual budget--could not be utilized to audit people making less than $400,000, the most they would agree to was to say they did not ‘intend’ to audit them.  That’s because they know from the analysis of the Joint Committee on Taxation that most underreported income occurs among taxpayers earning less than $200,000 per year, and from the Congressional Budget Office that they cannot collect the $200 billion they are claiming without auditing people making less than $400,000.  If they truly do not intend to audit anyone making less than $400,000, then they would have supported my amendment, turning ‘intent’ into binding statute.” (U.S. Senate Finance Committee Ranking Member, Press Release, 8/11/2022)

All 50 Senate Democrats voted against Sen. Crapo’s amendment to prevent their newly supersized IRS from going after Americans who earn less than $400,000 per year in income for the revenue Democrats want to raise. (S. Amdt. 5404, H.R. 5376, Roll Call Vote #296: Amendment Rejected 50-50: D 0-48; R 50-0; I 0-2, 8/07/2022)

CBO Estimates Democrats’ Supersized IRS Will Extract At Least $20 Billion From Taxpayers Making Less Than $400,000 Per Year

“FOX has confirmed that the Congressional Budget Office informed lawmakers that audits of taxpayers making under $400,000 accounts for about $20 billion in revenue for the Inflation Reduction Act. FOX has obtained the CBO's score of a Senate amendment proposed by Republican Idaho Sen. Crapo that would have prevented any additional IRS funds to audit taxpayers making less than $400,000 a year. The CBO says with this amendment, the Inflation Reduction Act would lose $20 Billion dollars in revenue. This CBO score was just emailed to Senate offices this morning and, therefore, was not ready in time for the Senate vote on the IRA.” (“IRS Audits Will Generate $20B From Those Making Under $400K Under Inflation Reduction Act,” Fox News, 8/12/2022)

• CONGRESSIONAL BUDGET OFFICE: “CBO has not completed a point estimate of this amendment but the preliminary assessment indicates that amendment 5404 would reduce the ‘non-scorable’ revenues resulting from the provisions of section 10301 by at least $20 billion over the FY2022-FY2031 period.” (House Ways and Means Ranking Member Kevin Brady, Press Release, 8/12/2022)

THE WALL STREET JOURNAL EDITORIAL BOARD: “Democrats spent last week swearing that only high earners would be squeezed under their plan to beef up the Internal Revenue Service. It took only a few days for the Congressional Budget Office to put that narrative to rest. A quick analysis from the budget scorer confirms that the audit expansion will ensnare the middle class. The CBO made the point in an Aug. 12 letter to Sen. Mike Crapo, who had sought to bind Democrats to their promise to limit audits to high earners…. Mr. Crapo proposed an amendment to ensure new audits would exclude taxpayers earning less than $400,000, but Democrats voted it down 51 to 50. Mr. Crapo then asked the CBO to calculate the effect his amendment would have had. The agency found that increased scrutiny on filers earning less than $400,000 would account for $20 billion over 10 years, out of a total of about $204 billion that Democrats hope to collect through a bigger, badder IRS. In other words, the IRS expansion as it’s currently designed could collect billions in revenue from new middle-class audits.” (Editorial, “The Middle Class Won’t Escape the New IRS Audit Wave,” The Wall Street Journal, 8/14/2022)

• “The problem is that for every tax cheat the IRS identifies, several more compliant tax filers will be subjected to needless scrutiny. Many of the hundreds of thousands of people audited each year are chosen at random, and most taxpayers can’t afford a lawyer to go to Tax Court to contest IRS claims of tax liability. They write the check to end the relentless IRS pursuit, whether or not they think it’s fair…. On Friday House Democrats passed the tax- and-spending bill that includes the supersize IRS on a party-line vote, and President Biden will sign it this week. Good luck to readers as the taxman cometh.” (Editorial, “The Middle Class Won’t Escape the New IRS Audit Wave,” The Wall Street Journal, 8/14/2022)

The Nonpartisan Joint Committee On Taxation Found That Most Of The Revenue Democrats Want From Their Supersized IRS Would Come From Taxpayers And Small Businesses Making Less Than $200,000 A Year

SEN. CRAPO: “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)

THE WALL STREET JOURNAL EDITORIAL BOARD: “The main targets will by necessity be the middle- and upper-middle class because that’s where the money is. 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 IRS knows the super-wealthy employ lawyers and accountants who make litigation time-consuming and risky. It also knows that Democrats would howl if the agency pursues fraud in the earned-income tax credit program, despite what the IRS has estimated are $18 billion in improper payments each year.” (Editorial, “The IRS Is About to Go Beast Mode,” The Wall Street Journal, 8/02/2022)

“Small business owners may soon be in for a lengthy and expensive battle with the IRS, tax experts warn. A key provision in the Inflation Reduction Act — which throws an extra $80 billion to the IRS to improve the agency’s collection of under-reported income — will end up targeting small business owners to pay for the legislation, according to nonpartisan watchdog the Joint Committee on Taxation. The group estimates that between 78% and 90% of the estimated additional $200 billion the IRS will collect will come from small businesses making less than $200,000 annually. Just 4% to 9% would come from businesses making north of $500,000 a year — meaning the legislation is in sharp contrast to President Biden’s longstanding claim that he wouldn’t raise taxes on anyone making less than $400,000. ‘The IRS will have to target small and medium businesses because they won’t fight back,’ Joe Hinchman, executive vice president at National Taxpayers Union Foundation, told The Post. ‘We’ve seen this play out before … the IRS says “We’re going after the rich” but when you’re trying to raise that much money, the rich can only get you so far.’” (“80% Of New IRS Revenue Will Come From Small Businesses Earning Under $200K: Tax Experts,” New York Post, 8/03/2022)

The IRS Track Record Suggests Lower Income Households Will Also Likely Find Themselves In The Crosshairs

“GOP lawmakers have sounded the alarm over the proposal, warning that it could have serious ramifications for lower-income workers. That's because the IRS disproportionately targets low-income Americans when it conducts tax audits each year. In fact, households with less than $25,000 in earnings are five times as likely to be audited by the agency than everyone else, according to a recent analysis of tax data from fiscal year 2021 by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University. The reason for that is a rise in what is known as ‘correspondence audits,’ meaning the IRS conducts reviews of tax returns via letters or phone calls rather than more complex face-to-face audits…. According to the Syracuse study, more than half of the correspondence audits initiated by the IRS last year — 54% — involved low-income workers with gross receipts of less than $25,000 who claimed the earned income tax credit, an anti-poverty measure.” (“How Democrats' Beefed-Up IRS Could Hurt Low-Income Americans,” Fox Business, 8/05/2022)

• “[T]axpayers with a total positive income that ranged from $200,000 to $1 million had one-third the odds of being audited by the IRS compared to the lowest-income wage earners. About 9 million taxpayers reported these high-income levels in 2021, but fewer than 40,000 of their returns were audited, or roughly 4.5 out of every 1,000. That contrasts sharply with lower-income Americans, who faced an audit rate of 13 out of every 1,000.” (“How Democrats' Beefed-Up IRS Could Hurt Low-Income Americans,” Fox Business, 8/05/2022)

It Won’t Make Much Difference To The Climate At All

THE WASHINGTON POST: “All of which explains why the economic and climate deal announced last week by Senate Democrats, which would represent America’s biggest actions ever to curb climate change, can scarcely be expected to have an immediate, measurable impact on the warming planet.” (The Washington Post, 8/1/2022)

Two Different Climate Models Suggest Democrats’ Green New Deal Spending ‘Will Have No Notable Impact On The Climate’

AMERICAN ENTERPRISE INSTITUTE’S BENJAMIN ZYCHER: “And then there is the argument that the deal would reduce greenhouse gas emissions by around 40 percent (below 2005 levels) by 2030. Does Manchin understand that the global temperature effect by 2100 would be 0.055 degrees C, — an effect that would not be detectable — using the EPA climate model?” (Benjamin Zycher, “What Does Senator Joe Manchin Believe He’s Getting?,” RealClearEnergy, 8/4/2022)

• “[U]sing the Environmental Protection Agency climate model. The U.S. GHG emissions reduction claimed by the proponents of the IRA is 40 percent (below 2005 levels) by 2030, a deeply problematic assertion for reasons that I ignore here. The temperature effect by 2100: 0.044°C. Because the standard deviation of the surface temperature record is 0.11°C, that effect that would not be detectable.” (Benjamin Zycher, “Bill Gates Approves,” Real Clear Energy, 8/15/2022)

THE WALL STREET JOURNAL EDITORIAL BOARD: “Our contributor Bjorn Lomborg looked at the Rhodium Group estimate for CO2 emissions reductions from Schumer-Manchin policies. He then plugged them into the United Nations climate model to measure the impact on global temperature by 2100. He finds the bill will reduce the estimated global temperature rise at the end of this century by all of 0.028 degrees Fahrenheit in the optimistic case. In the pessimistic case, the temperature difference will be 0.0009 degrees Fahrenheit. In other words, the climate provisions in this ballyhooed legislation will have no notable impact on the climate.” (Editorial, “Tilting at Climate Windmills,” The Wall Street Journal, 8/08/2022)

• “This isn’t surprising. No matter what the U.S. does to reduce greenhouse-gas emissions, it will be dwarfed by what the rest of the world does. China, India and Africa aren’t about to stop burning fossil fuels as they develop, and China is sprinting ahead to build huge new coal capacity despite its pledge to start reducing emissions after 2030.” (Editorial, “Tilting at Climate Windmills,” The Wall Street Journal, 8/08/2022)

But It Will Send Your Money To Wealthy Households To Purchase Expensive Electric Vehicles

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 WALL STREET JOURNAL EDITORIAL BOARD: “The Biden Administration is using regulation to essentially mandate that auto makers churn out electric vehicles. Now taxpayers will subsidize that cost, on top of the $7,500 EV tax credits so affluent Americans can buy more Teslas.” (Editorial, “The Schumer-Manchin Tax and Subsidy Pact,” The Wall Street Journal, 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 137-141: “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 pre10 ceding 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, 117^th Congress)

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)