Inflation Reduction Act

Floor Speech

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Mr. THUNE. Mr. President, ``You don't want to take money out of the economy when the economy is shrinking.'' ``You don't want to take money out of the economy when the economy is shrinking.'' Those aren't my words. Those were the words of the current Democratic leader in 2008: ``You don't want to take money out of the economy when the economy is shrinking.''

Well, apparently, it is a philosophy the Democratic leader no longer subscribes to because, last week, he introduced legislation to take money out of the economy when the economy is shrinking.

The Democrats' so-called Inflation Reduction Act--which is a misnomer if ever there was one, since the bill will do nothing to help alleviate our current inflation crisis--will take hundreds of billions of dollars out of the economy in the form of new tax hikes and comes just as our economy posted a second quarter of negative growth.

Notably, the bill imposes a $313 billion tax hike on American businesses, with roughly half of that increase falling on American manufacturers. I guess the President's commitment to boosting American manufacturing takes a backseat to raising revenue to fund Democrats' Green New Deal priorities.

I don't think I need to tell anyone what happens when you raise taxes on businesses, particularly when the economy is shrinking. You get less growth, fewer jobs, and lower wages. According to an analysis from the National Association of Manufacturers, in 2023 alone, the Democrats' bill would reduce real gross domestic product by more than $68 billion and result in 218,108 fewer workers in the overall economy--a $68 billion reduction in GDP and more than 218,000 fewer workers.

And ordinary Americans would bear a substantial part of the burden of this tax increase. According to data from the nonpartisan Joint Committee on Taxation, the Democrats' bill would increase the tax burden of Americans across every income bracket, with more than half of the increased tax burden falling on Americans making $400,000 or less. Next year alone, the Democrats' bill would increase the tax burden on Americans earning less than $200,000 by $16.7 billion.

Democrats are brazenly attempting to sell this new tax as somehow closing a loophole instead of hiking taxes on American businesses, but that isn't even close to being the truth. When companies pay less than the current corporate tax rate, they are often simply taking advantage of tax credits that Republicans and Democrats put in place to encourage investment in things like research and development or the production of new technologies.

Democrats aren't closing a loophole in the tax bill. Let's face it. They are raising taxes on American businesses at a time when our economy has posted two consecutive quarters of negative growth. They are raising taxes on businesses that are already struggling with historically high inflation.

Democrats claim they will make large companies pay at least a 15- percent minimum tax, but that isn't true either because Democrats have created carve-outs to their own minimum tax. That is right. Not all companies will have to pay the new book minimum tax. For instance, green energy companies and companies that take green energy tax credits will be allowed to pay less than the Democrats' alternative minimum corporate tax rate. In other words, if you are a member of or invest in the Democrats' preferred industries, you get special tax treatment under their legislation. So much for ensuring that all companies--all companies--``pay their fair share.''

In addition to their $313 billion tax hike on American businesses, Democrats' legislation also raises taxes on investment--another bad idea at a time when our economy is already shrinking. Perhaps Democrats' real plan is to reduce inflation by slowing our economy and ensuring that we enter a recession or what is known as stagflation.

Democrats' legislation also raises taxes on oil and gas production even as Americans continue to struggle with high energy prices, including a 75-percent increase in gas prices since President Biden took office.

Taxes aren't the only way the Democrats raise revenue in this bill to pay for their Green New Deal measures. The Democrats' bill also attempts to raise revenue by increasing IRS audits and enforcement. The Democrats' legislation gives the IRS an additional $80 billion in funding over 10 years--$80 billion, about six times their annual budget. This would allow the IRS to hire an additional 87,000 employees, meaning that the IRS would have nearly--do you believe this?--three times as many personnel as U.S. Customs and Border Protection, the Agency that is charged with overseeing security at our Nation's borders--87,000 new employees. The IRS's budget would also substantially exceed Customs and Border Protection's budget if this legislation is enacted.

Now, you might think that given the raging crisis at our southern border, the Biden administration would be focused on beefing up funding and personnel for Customs and Border Protection instead of the IRS, but you would be wrong. Apparently, the need to find money for Democrats' Green New Deal trumps the need for a secure border.

Of the additional $80 billion the Democrats' bill would hand to the IRS, 57 percent or more than $45 billion would go to enforcement and only 4 percent to taxpayer services. Think about that. Four percent for an Agency, as I said on the floor yesterday, that only succeeded in answering about 1 out of every 50 taxpayer phone calls during the 2021 tax season and has repeatedly, as we all know, mishandled sensitive taxpayer data.

To name just one instance, confidential taxpayer information was either leaked or hacked from the IRS last year and shared with the left-leaning ProPublica in order to advance a partisan agenda. More than a year later, the IRS still hasn't provided meaningful followup to Congress or accountability to taxpayers for that leak. Yet Democrats' focus is not on improving the IRS responsiveness and accountability but on boosting the number of audits.

Speaking of those audits, no one should think the IRS would be just auditing major corporations and billionaires. No, this bill would result in a lot of audits of small businesses and ordinary Americans. In fact, it is extremely unlikely the Democrats will be able to gather the revenue they are claiming they can get from increased IRS enforcement unless they audit Americans making less than $200,000 a year.

Based on data, again, from the Joint Committee on Taxation, 78 to 90 percent of the revenue projected to be raised from underreported income would likely come from those making under $200,000. Only 4 to 9 percent would come from those making more than $500,000. That, again, is from the Joint Committee on Taxation.

I just want to repeat that. Seventy-eight to ninety percent of the revenue projected to be raised from underreported income would likely come from those making under $200,000 a year. In other words, all this talk about audits and, you know, closing the tax gap and forcing people to pay taxes that are due that they are not paying today and implying that somehow that is all going to apply to high-income taxpayers or big corporations or big businesses is just flat inconsistent with the data and the facts as compiled by the Joint Committee on Taxation. Up to 90 percent of the revenue projected to be raised from underreported income would come from those making less than $200,000 a year.

So, Mr. and Mrs. American Taxpayer, get ready. Get ready for the IRS enforcement auditor to come to your house and to start harassing you so that the Democrats can pay for their massive tax-and-spending spree.

After more than a year of high inflation spurred by Democrats' reckless American Rescue Plan spending spree passed last year and with an economy that has shrunk for the past two quarters, it is hard to believe the Democrats are trying to pass hundreds of billions of dollars in tax hikes, but that is exactly what is happening. Once again, economic common sense is taking a back seat to Democrats' big spending and big government ideology.

Democrats have already inflicted a lot of economic pain on the American people, and if this legislation passes, there is more to come.

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