Kudlow slams ‘Inflation Reduction Act:’ This is a ‘terrible bill’
‘Kudlow’ host Larry Kudlow unpacks the ‘Inflation Reduction Act’ and discusses the consequences of the bill on Americans.
The implications of the Manchin-Schumer Inflation Reduction Act of 2022 on the upcoming midterm elections could potentially hinder election chances for the Democratic Party as they seek to maintain their slim majority in the House and Senate, according to multiple tax experts and strategists.
In statements provided to Fox News Digital, several strategists highlighted the impact new taxes have on Americans, insisting Democrats must be honest with voters about the measure going into the midterm elections. Specifically, the experts said Democrats should clarify the cost of the proposed legislation and how tax increase, no matter the size, has the potential to impact American taxpayers.
While some strategists noted benefits that would stem from the passage of the measure, others insisted that new taxes amid an economic recession could move some Democratic voters to favor Republican candidates in the midterm elections. In contrast, others insisted that Democrats should campaign using the legislation in the days leading up to the midterm elections.
The nonpartisan Joint Committee on Taxation (JCT) revealed in an analysis last week that the Manchin bill, which would spend $433 billion on climate change initiatives, would increase taxes by billions of dollars, including on middle-class earners.
VULNERABLE DEMOCRATS WON'T SAY IF THEY SUPPORT MANCHIN BILL, RAISING TAXES DURING RECESSION
Sen. Joe Manchin speaks to reporters in the Hart Senate Office building on Aug. 1, 2022, in Washington. (Anna Moneymaker/Getty Images)
According to the JCT, Americans making less than $10,000 per year would see a 0.3% tax hike starting in 2023. Overall, starting in 2023, taxes would increase by $16.7 billion for Americans earning less than $200,000. For taxpayers earning between $200,000 and $500,000, the bill would increase taxes cumulatively by $14.1 billion.
Brooke Rollins, president and CEO of the conservative America First Policy Institute, said the "stakes for hardworking Americans and their families could not be higher" than with the Inflation Reduction Act.
"At the core of the laundry list of issues our nation now faces is a crisis of leadership coupled with a failure to implement policy that puts the American people first," said Rollins, the former White House director of the Domestic Policy Council and chief strategist in the Trump administration.
"In a last-ditch effort to put a 'win' on the scoreboard before the midterms and after multiple failed attempts, the Biden Administration is yet again trying to revive the behemoth of a spending bill — this time deceitfully disguised as an effort to reduce inflation," she added.
Rollins also insisted the measure backed by Sen. Joe Manchin, D-W.Va., "shatters" Biden's promise to Americans that only those making more than $400,000 will see an increase in taxes as it "raises taxes on people earning as little as $30,000 a year."
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, insisted the measure has a "host of things to like," including "deficit reduction in a time of near record debt, policies to push against inflation rather than exacerbate it, and closing tax loopholes and increasing tax compliance."
"The JCT score shows the Inflation Reduction Act has a negligible effect on middle-class taxes when it’s fully phased in – and in fact, the bill as a whole is a very small net tax cut," MacGuineas said. "Once you account for the bill’s consumer tax rebates, insurance subsidies, and drug price reductions – not to mention the bill’s deflationary effects – the Inflation Reduction Act will almost certainly increase disposable income for families making less than $400,000."
MANCHIN-SCHUMER SPENDING BILL TARGETS TAX LOOPHOLE FAVORED BY INVESTORS
U.S. Capitol dome is lit by the morning sun, March 14, 2022. (Bill Clark/CQ-Roll Call, Inc)
The bill was introduced just days after the gross domestic product (GDP) contracted for a second consecutive quarter from April-June, signaling the economy had entered into a recession.
Grover Norquist, founder and president of Americans for Tax Reform, said the passage and debate over the bill "shrieks that even in a recession, the Democrat Party has one playbook: raise taxes."
"Democrats cannot stop spending," Norquist said. "The Schumer-Manchin tax and spend bill will highlight, through repetition, the policy failures of the Biden administration and the Democrat party. Like a bad game of Jeopardy, whatever the questions, the answer is always the same: higher taxes, higher spending and higher energy costs. It will keep the nation’s focus on inflation, falling real wages, high levels of non-work and recession."
Dr. Nomi Prins, journalist and author of "Permanent Distortion," said that "albeit tiny," JCT's analysis contradicts the White House's argument that the bill won't raise taxes. "This is a case of optics against substance," Prins said. "The optics of denying any rise in taxes compared to what the JCT report is showing don’t look good. However, exaggerating the increase without mentioning the benefits is also off-base."
"According to the 6 pages of federal taxes changes per income category in the JCT report, there is a rise, though a fractional one of between 0.1%, and 0.2% in taxes for taxpayers making between $30,000 and $100,000 per year for 2023," Prins stated. "That increase is .3% for taxpayers making between $100,000 and $500,000 a year, and .5% for taxpayers making more than $500,000 per year."
"The White House considers the JCT analysis a measure of the cost side of taxes that ignores other direct benefits from the bill," Prins added. "That’s like saying that the payroll tax withdrawal for social security is not a tax because it’s a benefit. Ultimately, as with many hot-button issues, rhetoric and definitions matter. Which is why the Democrats are having to re-frame what a tax raise means."
DEMOCRATS RELY ON MISLEADING MESSAGING TO SELL MANCHIN-SCHUMER BILL
Senate Majority Leader Chuck Schumer speaks with reporters at the Capitol, July 19, 2022. (AP Photo/J. Scott Applewhite)
"As people eye midterm elections and inflationary issues, it’s safe to assume voters could balk at even the possibility of minor additional taxes – whether they’re offset by energy credits, health savings and other benefits or not," Prins concluded. "That can shift voters to the GOP in November."
Kristin Tate, a columnist at The Hill and a fellow at Independent Women’s Voice, insisted the Democrats are "shameless" as they push the legislation.
"This is a disgraceful, massive slush fund but they tagged the name 'inflation reduction act' onto the bill to make it sound more palatable," Tate said. "All the extra spending will likely result in an additional boost of inflation over the short term."
"The only effect it will have on the midterms will be another ‘talking point’ that the flagrantly leftist media will promote every week up to election day," she added. "The only thing slowing down inflation right now are higher interest rates, the higher cost of borrowing, and a slowing down of the overall economy — hardly an ideal solution to reducing inflation."
Christopher Hahn, a Fox News contributor and former director of communications for Senate Majority Leader Chuck Schumer, D-N.Y., said the measure is a "great first step" at addressing economic woes.
"The inflation reduction acts is a great first step and stemming the tide of rising prices for America’s Middle and working class families," Hahn said. "The fact of the matter is, most Americans will experience no tax increase as a result of this plan, however the government will see increased revenues as a result of better productivity and expanding markets brought on by investments in green energy."
A gas pump displays the price of fuel at a station in McLean, Virginia, June 10, 2022. (Saul Loeb/AFP via Getty Images)
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Jonathan Kott, an attorney and a former communications director for Manchin, said Democrats "should absolutely campaign on this bill for the next 98 days."
"It’s a historic piece of legislation that will help lower inflation, lower costs on middle class families and is another in a long line of Accomplishments for President Biden, Sen. Manchin and the Democratic Congress," Kott added.
Last year, Biden made a pledge that no American making under $400k a year would pay "a single penny" in new taxes.
The Senate is expected to take up the Manchin bill for a vote this week.
Fox News' Aubrie Spady, Haris Alic, and Megan Henney contributed to this report.
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