Inflation

Floor Speech

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Mr. THUNE. Mr. President, as I begin this morning, let me just start by reacting to a couple of things that have been said here on the floor this morning already by my Democrat colleagues.

You know, the leader, Republican leader, when he was down here earlier, talked about the impact of inflation on the economy, and I have to tell you, that is very real. The inflationary impact is being felt all across this country. Energy costs are up, gasoline costs are up by huge amounts. Food costs are up in this country. Housing costs are up.

There isn't hardly any area of our economy where people aren't being impacted by inflation, meaning that the dollars that they earn are stretching less all the time. That is not a fake thing; it is not a temporary thing; it is a real thing. People are experiencing it in their economic lives on a daily basis, and to hear the Democratic leader say, well, you know, all the spending they are going to do is not going to cost anything, that it is going to be covered by tax increases and those tax increases are just going to hit people in the higher income categories, also is something that just isn't accurate.

Now let me just for a minute suggest something that I think is sort of fundamental when it comes to economics, and that is, when you have too many dollars chasing too few goods, you get inflation. The demand for a product goes up, and when the demand goes up, the price usually follows along with it.

Well, we have right now a lot of government dollars that have been swirling around the economy for some time, which is why I think in many respects we are seeing this inflation--the highest inflation that we have seen literally in 30 years in this country, affecting, as I said earlier, kind of all sectors of the economy and things that people have to purchase in their daily lives.

If you put more dollars out there, which is what is being talked about by our Democratic colleagues--another $3.5 trillion that would flood the economy--I think the expectation is a very real one that you are going to see that inflationary pressure accelerate, intensify, because when you have that much money, that many dollars chasing too few goods, inflation is an inevitable result. The idea that we need to spend another $3.5 trillion and that somehow that is going to be a solution right now also is not consistent at all with the facts and the data.

We saw here just recently the Congressional Budget Office come out with a report that suggested that government revenues are at the highest level--biggest increase, I should say, year over year since 1977. We are now over $4 trillion this last year in revenues--$4 trillion. It has never happened before in this country. It is the biggest 1-year increase in revenues since 1977, paid for largely by corporate tax receipts, which were up 75 percent year over year, and also by individual income tax receipts, much of which was coming from high-income earners. A lot of that increase that we have seen in income tax receipts in this country in government revenues comes from those people who are high-income earners.

All that to say, if you have that much revenue coming in to the government in this country, why, then, would you need to go out and raise taxes even more and spend even more when you have an economy that is in the process of recovering and people concerned about inflation? And the Democrats' solution to that is to spend more, put more money out there, and raise taxes even higher at a time when you have historic revenue coming in to the Federal Government. It is the first time ever--ever--in our Nation's history that we have had over $4 trillion in revenue come in.

The other thing that was mentioned by my colleague from Illinois just a minute ago is that the issue of the tax gap, which was alluded to earlier this morning on the floor by, again, the Republican leader--the Democratic solution is to go after people, essentially shake them down, and get them to pay more in taxes.

I am not suggesting for a minute that there aren't people out there who aren't paying the taxes that they should under the law and that the law needs to be enforced. What I am suggesting is that in the effort to close that so-called tax gap, there are huge differences of opinion about what effect that would have, how much could be generated, and who is ultimately going to pay for that.

Well, now there is additional research out coming from the Joint Committee on Taxation that, in fact, the Democratic efforts to close the tax gap will hit lower income taxpayers the most.

To say that none of the tax increases or none of the tax policies that are being proposed by the Democrats in their $3.5 trillion tax- and-spending spree proposal won't harm people who are making less than $400,000 a year is laughable under any--any--plausible review of these tax policies and proposals, but this one in particular hits hardest at low-income taxpayers.

According to the Joint Committee on Taxation, people making less than $50,000 a year will pay anywhere from 40 to 57 percent off all the revenue that is generated off of that one proposal. People making less than $100,000 a year will pay somewhere between 65 and 78 percent of all the taxes that are generated under that particular proposal in the Democratic plan. People making less than $200,000 a year would pay up to 90 percent of the amount generated under that particular proposal in the Democrats' plan. So people making less than $200,000 a year are going to be paying tens of billions of dollars more in taxes just on that one proposal which is out there, allowing the IRS essentially to snoop into people's personal transactions up to the $600 level. I don't think there is any way you can get around the fact that under that scenario, people in the lower income categories are going to end up paying the lion's share of the cost of that.

So this isn't going to be without cost. This isn't going to be without consequence. This is not going to be without impact on lower income taxpayers in this country. They are going to get hit and they are going to get hit hard under this Democratic proposal.

So when we talk about it, we are talking about real impacts, real economic impacts on the American people's lives. And we are going to continue to do everything we can to fight against really bad tax policies being put in place to finance massive amounts of spending, expansion, and growth of government at a time when government revenues just hit a historic high; never seen before; biggest year-over-year increase in revenue since 1977. And Democrats want to raise taxes-- taxes--on everybody, including those in the lower income categories.

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