Would the 'Inflation Reduction Act' Boost Savings or Raise Costs for Americans?
Summary from the AllSides News Team
Democrats working to pass the 'Inflation Reduction Act' face claims that the bill would lead to higher costs for Americans.
The bill aims to raise billions of dollars over the next decade to reduce debt and fund climate change and energy programs. An analysis by the nonpartisan Joint Committee on Taxation (JCT) suggests it would raise $16.7 billion in tax revenue from Americans earning less than $200,000/year in 2023 and would raise taxes by $326 billion in the next decade. The analysis also suggests that tax increases will be frontloaded, and that by 2027, hikes for many income groups will ease. The White House and Treasury Secretary Janet Yellen rebuked reports that Americans making less than $400,000/year would see higher taxes, which would break a 2020 campaign pledge from President Joe Biden.
Left- and right-rated sources framed fiscal analysis of the bill very differently. The New York Times (Lean Left bias) said the JCT report showed the bill "would not cement a giant tax increase or result in profligate federal spending." Yahoo News highlighted research that suggested the bill "would save the average household $1,800 per year on energy bills." Conversely, Fox Business said the report showed that "every tax bracket would pay more in taxes," and the Wall Street Journal Editorial Board (Lean Right bias) called the proposed bill "a tax increase on nearly every American." Many on the right juxtaposed the purported tax increases with Biden's tax-increase campaign pledge.
Featured Coverage of this Story
From the Center
0.25% or 0.33%? Democrats’ Inflation Reduction Act wouldn’t lower prices by all that much, analysts sayThe reviews are coming in for Senate Democrats’ Inflation Reduction Act of 2022, and some analysts are suggesting the $739 billion healthcare, energy and tax package won’t actually reduce inflation by a great deal.
“We estimate that the Inflation Reduction Act will produce a very small increase in inflation for the first few years, up to 0.05 percent points in 2024. We estimate a 0.25 percentage point fall in the PCE price index by the late 2020s,” said Penn Wharton Budget Model analysts in a report, referring to the Federal Reserve’s...
From the Left
Inflation Reduction Act would lead to $1,800 in savings for average household, analysis findsSweeping climate and health care legislation unveiled by Democrats last week would lead to significant cuts in energy costs for American households, according to a new analysis.
A report by non-profit group Rewiring America found that the tax incentives included as part of the $369 billion dedicated to climate initiatives in the Inflation Reduction Act would save the average household $1,800 per year on energy bills.
“It is a market-tilting level of investment,” Ari Matusiak, the group's co-founder and CEO who was involved with the crafting of the bill, told Yahoo Finance. “The beneficiaries...
From the Right
Most Americans will feel tax pain from Dem inflation bill despite Biden's past promises: analysisThe vast majority of Americans will pay more in taxes as a result of Democrats' inflation bill despite President Biden's pledge not to raise taxes on those making under $400,000 per year.
The Inflation Reduction Act — unveiled Wednesday by Sen. Joe Manchin, D-W.Va., and endorsed by Biden — would increase tax revenue by $16.7 billion from Americans earning less than $200,000 a year, according to a nonpartisan analysis from the Joint Committee on Taxation (JCT) published Friday. Nearly every tax bracket would pay more in taxes with those making below $10,000...
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