The Tax Foundation conducted an analysis and found that the Inflation Reduction Act might result in the loss of 30,000 jobs.
The conservative organization discovered that the legislation, which is expected to be narrowly passed in the Senate this weekend, would result in significant “full-time equivalent” job losses, as well as a 0.1 percent decrease in GDP and 0.1 percent decrease in wages, The Washington ExaminerReported on August 2.
On jobs specifically, the foundation said that the 15 percent minimum corporate tax would cost roughly 23,000 jobs and “carried interest” would gut another estimated 5,000.
Higher taxes will cost companies, which could force them to cut back on their workforce to afford it. Democrats don’t want to acknowledge the trickle down effect.
When referencing the bill’s supposed intention, to reduce inflation, it’s unclear what it would actually do.
The foundation
Lastly, to the extent the durability of the bill’s provisions are in doubt—that is, due to the lack of bipartisan support—it may have little impact on expectations about the fiscal outlook and therefore inflation. Overall, though the long-term effect on inflation remains uncertain, it is likely that it will be very close to zero.
As RedState reported, it’s true that the July jobs report surpassed expectations by adding on 528,000 jobs and touts a 3.5 percent unemployment rate, but the hype around the report misses the point. What’s hurting Americans most is inflation, as reflected in the Consumer Price Index. With the annual inflation rate at 9.1 percent as of the June report, it’s clear that while Americans are working, prices are still doing damage.
Federal Reserve Economic Data shows that the average American has less disposable income than they once did. Jay Cost, an American Enterprise Institute Fellow, posted this chart on Twitter. It shows that there was a spike in stimulus payments, but the extra money quickly ran out.
Wow, this is incredible. This is amazing. pic.twitter.com/j3BlKvOKfe
— 𝐉𝐚𝐲 𝐂𝐨𝐬𝐭 (@JayCostTWS) August 6, 2022
It is obvious that the Inflation Reduction Act doesn’t live up to its billing and will likely do more harm than good. High government spending has been the primary factor in this inflation problem. It is important to realize that more money will not solve the problem.
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