The Inflation Reduction Act is set to increase taxes on virtually every income tax bracket despite promises from the Biden administration and arguments from Democrats that regular Americans would not see their tax bill increase under the proposal, according to data from the Congressional Joint Committee on Taxation (JCT).
President Joe Biden issued a statement last week saying that the legislation, a reconciliation bill intended to reduce inflation and the federal deficit, includes “no tax increases for those making under $400,000.” But taxes will go up for middle-income Americans across the board as well as for those making under $10,000 and between $30,000-$40,000, while not a single income group will see cuts until 2031, according to the JCT’s estimates.
The JCT found that taxes would go up by a total of $16.7 billion for Americans making less than $200,000, and by $14.1 billion for Americans making between $200,000 and $500,000.
Tax rates will begin to increase for a number of income groups as soon as the 2023 calendar year, according to the JCT. Those making less than $10,000 would see their average tax rate increase from 7.3% in 2022 to 7.6% in 2023, while those making between $30,000-$40,000 would go from 7.8% to 7.9%, and those making between $100,000-$200,000 would go from 19.1% to 19.4%.
Biden promised no tax hikes if you make less than $400K per year
The “Inflation Reduction Act” raises taxes for everyone making over $30K per year pic.twitter.com/4D4gwsqjdu
— John Hasson (@SonofHas) July 30, 2022
“Senate Democrats are trying to violate the cardinal economic rule to never raise taxes during a recession,” Alfredo Ortiz, president and CEO of Job Creators Network, said in a statement shared with the Daily Caller News Foundation. (RELATED: ‘Higher Than We Expect’: Top Fed Official Issues Grim Prediction On Reining In Inflation)
Senate Finance Committee Chair Ron Wyden’s spokeswoman Ashley Schapitl pushed back against the estimates, arguing that the JCT analysis is incomplete since “it doesn’t include the benefits to middle-class families of making health insurance premiums and prescription drugs more affordable,” Politico reported.
White House press secretary Karine Jean-Pierre made a similar argument Monday when pressed on the incongruities between the JCT estimates and Biden’s claims.
“The JCT’s report that we’re seeing is incomplete because it omits the actual benefits that Americans would receive when it comes to prescription drugs, when it comes to lowering energy costs like utility bills,” Jean-Pierre said.
The White House directed the Daily Caller News Foundation to a Twitter thread from Chye-Ching Huang, executive director of NYU’s Tax Law Center, in which Huang fleshes out arguments for financial upsides to the bill in greater depth.
But it remains unclear how President Biden’s initial claim that taxes are not going to go up on those making under $400,000 dollars squares with JCT’s data, even if there are certain “indirect benefits” like “drug-price savings,” “mitigating the climate crisis” and “deficit reduction.” Tax rates on at least some individuals making under $400,000 will still increase, according to the JCT, a bipartisan committee, contrary to Biden’s claim.
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