Note To Governors: Cutting Taxes May Make Inflation Worse

Even as Republican governors blast President Biden and congressional Democrats for both causing inflation and failing to address it, they are promoting their own tax cuts that likely will add to consumer demand and raise prices.

Putting more money in people’s pockets will increase demand for goods at a time of supply shortages. That will drive up prices and worsen the inflation that the governors claim to be so worried about. And it will increase pressure on the Federal Reserve to raise interest rates even more than it planned.

What a deal: In exchange for modest tax savings, people will pay higher prices and interest costs.