The Manchin, Schumer ‘Inflation Reduction Act’ is a fraud

There is no doubt that the government could effectively set prices on a variety of drugs, since it controls roughly 36% of total healthcare spending. But drug companies, hit by those price limits, are almost sure to raise prices on other products, new drugs or even on those same products marketed to private customers. They will not simply absorb the lower profits delivered by the feds, nor should they.

Plus, the rising cost of prescription drug prices is not driving inflation. In fact, in May, while the Consumer Price Index rose 8.6%, prices paid for prescription drugs rose less than 2%.

So, capping a commodity that is not actually contributing much to inflation cannot be expected to bring it down.

Second, the bill will purportedly fight inflation by bringing down the deficit. Of course, since Democrats deny that their reckless $1.9 trillion American Rescue Plan blew up our already bloated budget deficit and delivered inflation, this is a tricky argument.

Apparently, some deficits are worse than others.

In any event, the deficit impact depends partly on whether giving the IRS an additional $80 billion will yield substantial incremental revenues.

In an earlier iteration of Build Back Better, the Biden administration estimated such an investment in tax snoops would yield $316 billion over 10 years; the nonpartisan CBO cut that down to $200 billion. Now Democrats estimate the windfall at $124 billion, a further downgrade that does little to build our confidence.

The other source of increased revenue comes from tax hikes that, according to the Joint Committee on Taxation, would raise an additional $16.7 billion on American taxpayers earning less than $200,000 in 2023. The proposal would raise another $14.1 billion from taxpayers earning between $200,000 and $500,000.

Moreover, over the 10-year window covered by the bill, the average tax rate paid by every single income category would increase.

That’s because the 15% minimum tax on “book” corporate profits – profits reduced by the immediate expensing of depreciation for tax purposes – will stifle business spending that increases productivity and that leads to wage increases. And, because corporations don’t eat those tax hikes – they pass them along via lower wages and reduced investment.

The National Association of Manufacturers says the tax next year will reduce income for workers by $17.1 billion – and that’s just one year. They conclude it will also cost 218,108 workers their jobs.

The bill, though, will give hefty taxpayer handouts to some favored industries. The Wall Street Journal notes that “companies will get tax credits for spending on wind, solar, critical minerals, biofuels, hydrogen, carbon capture, nuclear, “sustainable” aviation fuel, lithium-ion batteries, electric-vehicle charging stations and more.”

We’ve seen how successful the federal government can be when picking winners and losers. Remember Solyndra?

Democrats argue the bill will reduce our deficit by $300 billion over the next decade. However, if the ObamaCare subsidies contained in the bill become permanent, which they will, that number shrinks to only $89 billion – a drop in the federal bucket.

As our country slides into recession and deals with 40-year high inflation, this is not the time to experiment.

It is not the time to funnel hundreds of billions of dollars, in addition to similar amounts allocated in earlier bills, to favored causes. It is, for sure, not the time to raise taxes on job creators.

Democrats must deep-six this dangerous bill, or expect to be deep-sixed themselves come November.