Americans across all income categories would bear tax hike burden; manufacturing sector would be hardest hit
Washington, D.C.--U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, led a news conference with Finance Committee Republicans to highlight the tax hike proposals in the mislabeled “Inflation Reduction Act.” Analyses from nonpartisan experts have shown the legislation would increase the tax burden on low- and middle-income Americans; slam the manufacturing industry; and do nothing to lower inflation.
“The bottom line—this tax is dangerous for America.”
To watch Crapo’s full remarks, click HERE or the image above.
On who bears the burden of a tax hike:
“The Administration has been very careful to say ‘we aren’t raising the tax rates of anyone under $400,000.’ But everyone in America knows that when taxes are charged, people end up carrying the burden of those taxes.
“That burden comes because the incidence of the corporate tax is passed on to workers; to capital, or those who own the stock, people trying to invest in their retirement in a pension plan or 401K; and in price increases in the economy.
“The [Joint Committee on Taxation] found that in 2023, the tax burden would increase by $16.7 billion on Americans earning less than $200,000 per year. Another $14.1 billion would be borne by taxpayers earning between $200,000 and $500,000 per year. During the ten-year period, the average tax burden increases for nearly every single income category. When you get to the point at the end of the ten-year period, half to two-thirds of the burden would fall on those earning less than $400,000. That is the reality, regardless of the games that are being played in terms of describing who the taxes fall on.”
On which industries will be hit hardest by tax hikes:
“49.7 percent of those taxes will fall on manufacturers, and as you can see from the chart that it goes across various other aspects of our economy…This bill will slam manufacturers.
“The National Association of Manufacturers has indicated that because half of the impact of this will be on that industry, that this would be a reduction of our gross domestic product by $68.45 billion, a reduction of employment by 218 thousand workers and a reduction of employment income of $17 billion. These numbers show, very graphically, where the burden of this tax falls; contrary to the argument that is this just a tax on tax-cheats.”
On the success of Republican tax reform:
“We worked as hard as we could back in 2017 to get our tax code amended so we could incentivize capital formation in America, so that we could encourage the hundreds of billions, trillions of dollars being held offshore to be brought back to the United States and invested here. And it happened--companies came back to the United States and invested the capital. We got the strongest economy we had probably seen in all of our lifetimes. Employment was up, wages were up and the inflation rate was less than 2 percent--down around 1.5 percent. That is what was coming out of the effort to get capital formation back into the United States; this bill is going to slam it.”