Q: What’s wrong with the so-called “Inflation Reduction Act?”
A: The White House and Democrat-led Majority in Congress are taking yet another bite at the tax-and-spend apple. Despite 41-year high inflation and rising cost of living, the big spenders in Washington can’t keep themselves from reaching for red tape and red ink. Now, they’re pushing another version of Build Back Better that’s not any better than the first time it failed. They want to tax, tax, tax and spend, spend, spend. As a former chairman of the Senate Finance Committee, I’ve written tax policy long enough to know that when you tax something, you get less of it. So, with rising energy prices hammering Americans, the grand plan from the White House is to raise taxes on fossil fuel energy companies. That’s not going to help lower energy costs, gas prices or utility bills for U.S. households, farms or businesses. The partisan tax scheme makes room for Green New Deal subsidies and paves the way for new loopholes to avoid taxes. Handing out tax incentives for wealthy Americans to buy an $80,000 electric SUV isn’t going to help lower-income wage earners fill up their tank and get to work.
The Majority Leader and House Speaker also have their sights set on supersizing the IRS. They want to nearly double the IRS budget to ramp up audits on American taxpayer. Throughout the pandemic, my office heard from Iowans struggling to get answers from the beleaguered tax collecting agency. And yet, the $80 billion in new spending for the IRS includes less than one percent for customer service, while more than half will target enforcement, audits and investigations.
Q: What can Congress do to help Americans stretch their budgets?
A: America can’t tax and spend its way to prosperity. When farm inputs cost more and groceries cost more, U.S farms and households have to pinch pennies and tighten their fiscal belts. Iowa State University released a report showing inflation delivered a 33 percent cut to rural disposable incomes. With inflation accelerating, Washington needs to tap the brakes on spending. More spending will pour gasoline on the fires of inflation. The Biden administration wants a win, but spending $739 billion on top of the $2 trillion stimulus package last March won’t get America back on track.
What’s more, raising taxes on the life savings of Americans — as this bill does — is bad policy, especially when so many seniors on fixed incomes are dipping into their savings to pay for everyday living expenses. The economy, people’s savings and workers’ paychecks are shrinking. Credit card debt, federal spending and taxes are going in the wrong direction. The nonpartisan Joint Committee on Taxation says the Democrats’ partisan plan includes a $17 billion tax hike on families making less than $200,000, including those making as little as $10,000 a year. That clearly breaks President Biden’s promise not to raise taxes on anyone earning less than $400,000. What’s more, half of that tax hike will fall in the lap of America’s manufacturers and throttle investment during record inflation. This federal tax increase will eliminate 200,000 blue collar jobs here in the United States and lower wages and benefits for America’s workforce. The Biden administration likes to blame historic inflation on supply chain disruptions related to the pandemic. It’s dangerously short-sighted to slap a bigger tax burden on the U.S manufacturing sector when America needs to bring back jobs and make the components used in manufacturing here in the United States. This is one of the top issues farmers and small businesses bring up to me at my county meetings. The United States needs to shore up domestic manufacturing, not undermine efforts to restore it, and beef up the supply chain on our own shores. American consumers are fed up with empty store shelves and waiting for months on end to get car parts, furniture and other consumer goods. The last thing we ought to be doing is enacting reckless tax policy that will send manufacturing jobs overseas. The White House says it wants corporations to pay their “fair share.” But the companies who align with the Green New Deal are not held to the same standard. This partisan proposal gives green companies the ability to sell tax credits to other companies who will pay little or no taxes as a result. These are the sweetheart deals that rub hardworking taxpayers the wrong way. I’m fighting the administration’s reckless tax-and-spend agenda and will continue working to deliver tax relief that helps families keep more of their hard-earned money and encourage savings, investment and economic growth.