It would have stoked the inflation fire.
Inflation in President Joe Biden's economy is out of control, and the Democrat's $5 trillion socialist tax-and-spend measure would exacerbate the situation. Thankfully, West Virginia Senator Joe Manchin realized this and stated that he would vote no on the measure.
On an annualized basis, the consumer price index grew by 6.8% in November, the sharpest pace of inflation in in four decades.
Annual inflation was barely 1.4 percent when Mr. Biden assumed office in January, a pace that had been constant for the previous decade. Inflation has roughly doubled in the last five years, hurting American consumers and small companies with higher pricing for products and services.
Under Mr. Biden and the Democratic Congress, the cost of essential products has skyrocketed. Total energy expenses have climbed by 33%, while gas prices have soared by 58 percent. Beef and bacon prices have climbed by 21%, while furniture prices have risen by 12%.
Given that wage growth is falling behind, the erosion of buying power is particularly alarming. Over the last month, real average hourly wages fell by 0.4 percent, and over the last year, they have fallen by 1.9 percent. Because of inflation, Americans are becoming poorer.
Despite the fact that the cost of prescription pharmaceuticals has reduced by 0.3 percent and has been declining since 2019, Democrats want to implement socialist pricing controls and a new 95 percent tax on medicines.
The White House says that their package would improve inflation after months of downplaying the problem and calling it "transitory." In truth, the proposed law will exacerbate the problem by adding trillions of dollars in additional taxes and wasteful expenditures.
The plan proposes a $800 billion tax hike on American corporations, including a domestic 15% minimum tax on "book income" and multiple energy charges, including a $8 billion home heating tax.
Furthermore, the bill establishes a 15% global minimum tax, requiring American corporations to pay taxes on Global Intangible Low-Taxed Income on a country-by-country basis rather than on a global one. They would have to compute their taxes dozens, if not hundreds, of times under this approach, producing enormous tax complexity and uncertainty for corporations operating abroad and making the United States less competitive than foreign competitors like China.
These tax hikes will not be absorbed by companies, but rather by working families, even those earning less than $400,000 per year.
As if that weren't terrible enough, Democrats want to use these taxes to support over $2 trillion in handouts to left-wing special interests, as well as a variety of foolish and wasteful spending projects.
The bill's second-largest component is a proposal to raise the ceiling on deducting high state and local taxes, which will be a windfall for the rich in high-tax blue states.
According to the left-of-center Tax Policy Center, removing the SALT ceiling would benefit the wealthiest 1% of families 56 percent of the time, and the top 5% of households would profit over 80 percent of the time. Only 4% would be distributed to the lowest 80% of families.
The measure establishes new welfare payments for the next year by converting the child tax credit into a monthly payment with no job requirement and no fraud protections.
The erroneous payment rate for existing refundable credits is 25%, resulting in enormous needless spending.
Surprisingly, the law includes a special, industry-specific payroll tax credit of up to $50,000 for up to 1,500 employees at nearly every media outlet in the country. The Washington Post and The New York Times, for example, will be eligible for the funding.
Electric vehicles are also subsidized for those earning up to $800,000 per year under the law.
While Democrats claim that the bill is only $1.75 trillion in cost and is fully paid for, a recent Congressional Budget Office report found that if all of the spending in the bill were made permanent, the bill's true cost would be $5 trillion and the deficit would grow by $3 trillion over the next decade.
We are already on an unsustainable road as things are. Congress has committed $4.5 trillion in new government resources to combat the epidemic. Despite the fact that the most recent COVID-19 spending plan was enacted in March, $1 trillion has yet to be spent, and $500 billion has yet to be allocated.
Inflation has been wreaking havoc on American households and small companies for decades. Democrats will further exacerbate the problem by attempting to enact billions in additional tax hikes that would boost prices for working families.