The White House is dubbing the projections of a nonpartisan congressional committee that the Inflation Reduction Act would effectively raise taxes for many Americans “incorrect” and “incomplete,” pointing to benefits in the plan that would offset Americans’ pocketbooks.
White House press secretary Karine Jean-Pierre dismissed a report from the Joint Committee on Taxation that found that the brokered by Senate Majority Leader Chuck Schumer and Democratic Senator Joe Manchin would slightly increase tax rates overall for a number of income groups making less than $400,000. Republicans, who requested the report, have pointed out that President Biden has pledged not to raise taxes on Americans earning less than $400,000. The JCT report considers the indirect effect of a provision in the plan that would impose a minimum tax of 15% on many corporations, which some Republicans said would result in fewer jobs, and more costs that would be passed along to consumers.
“The JCT report that we’re currently 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 plan calls for $369 billion for climate and energy security proposals, as it raises taxes on the country’s largest corporations. It also empowers Medicare to negotiate the price of prescription drugs beginning in the year 2023. Democrats say the legislation will reduce the deficit by about $300 million.
The report projected that the average tax rate for those earning less than $10,000 would increase from 7.3% under current law to 7.6%, and from 7.8% to 7.9% for those earning $30,000 to $40,000 2023. The tax rate would increase for a number of income categories in that year, according to the JCT. However, by 2031, the JCT surmises the tax rate would be almost exactly the same as it is under present law for all income groups.
The White House has long argued that it is the bottom line of a family’s budget that matters when proposing potential spending packages.
Jean-Pierre on Monday took issue with a budget model from the Wharton School of the University of Pennsylvania, which estimates the plan would reduce deficits by $248 billion over the budget window, slightly increase inflation until 2024, and decrease inflation after that.
“We agree with Senator Manchin, you heard him a couple times yesterday, and disagree with Penn Wharton, as do a number of qualified experts,” she said.
Manchin, appearing on CBS News’ “Face the Nation” Sunday, insisted that when it comes to corporations, the proposal doesn’t increase taxes. Manchin said that instead, the proposal closes tax loopholes by imposing a 15% minimum tax on corporations with profits of at least $1 billion.
“This is a fairness in closing a loophole,” Manchin said. “So, I’m not raising any taxes.”