08-08-2022, 09:37 AM
My thoughts on the overall inflation act bill:
1) Calling it an "inflation reduction" bill and then not even hitting the key drivers of inflation is laughable.
2) The only piece of the bill I disagree with is the 15% minimum tax. "We can't figure out how to write tax laws correctly so we'll just enforce a minimum tax instead" is lazy legislation...I wouldn't expect anything less from democrat leadership. All this does is create a new spending burden on corporations which will pass those costs onto the consumer and reduce capital investments.
3) The prescription drug changes are wonderful but lets be honest.....you could make prescription drugs free and it wouldn't even budge the inflation needle. Prescription drugs' YoY rate is 2.5% and flat.
4) IRS tax enforcement - I guess one way to combat inflation is to take money out of everyone's pockets. You can't spend money if you don't have any. :) I personally support all ideas and forms of tax enforcement...Considering how earners making less than 75k/year account for half of all audits, i doubt this has the impact some will think it'll have.
5) The clean energy tax credits are nice. But again, how does this impact inflation? It doesn't. These benefits are to be realized over a 10 year span.....then who will end up taking advantage of these credits? People/businesses that can already afford clean energy solutions.
All of this is tied to the ridiculous notion (and hotly debated topic) that deficit reduction combats inflation.
Sources:
Democrat's white paper/one pager on the benefits of the bill:
https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf
Understanding fiscal deficits and their impacts on the economy
https://www.investopedia.com/ask/answers/021015/what-effect-fiscal-deficit-economy.asp
Minimum tax impacts
https://taxfoundation.org/book-minimum-tax-analysis/
Detailed CPI
https://www.bls.gov/news.release/cpi.t02.htm
1) Calling it an "inflation reduction" bill and then not even hitting the key drivers of inflation is laughable.
2) The only piece of the bill I disagree with is the 15% minimum tax. "We can't figure out how to write tax laws correctly so we'll just enforce a minimum tax instead" is lazy legislation...I wouldn't expect anything less from democrat leadership. All this does is create a new spending burden on corporations which will pass those costs onto the consumer and reduce capital investments.
3) The prescription drug changes are wonderful but lets be honest.....you could make prescription drugs free and it wouldn't even budge the inflation needle. Prescription drugs' YoY rate is 2.5% and flat.
4) IRS tax enforcement - I guess one way to combat inflation is to take money out of everyone's pockets. You can't spend money if you don't have any. :) I personally support all ideas and forms of tax enforcement...Considering how earners making less than 75k/year account for half of all audits, i doubt this has the impact some will think it'll have.
5) The clean energy tax credits are nice. But again, how does this impact inflation? It doesn't. These benefits are to be realized over a 10 year span.....then who will end up taking advantage of these credits? People/businesses that can already afford clean energy solutions.
All of this is tied to the ridiculous notion (and hotly debated topic) that deficit reduction combats inflation.
Sources:
Democrat's white paper/one pager on the benefits of the bill:
https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf
Understanding fiscal deficits and their impacts on the economy
https://www.investopedia.com/ask/answers/021015/what-effect-fiscal-deficit-economy.asp
Minimum tax impacts
https://taxfoundation.org/book-minimum-tax-analysis/
Detailed CPI
https://www.bls.gov/news.release/cpi.t02.htm
