Inflation is too much money chasing too few things. That is, there are two ways to reduce inflation: reduce the growth rate of the money supply or increase the growth rate of the economy. Won’t do the job either. In effect, this legislation would raise taxes and divert resources from the productive private sector to the inefficient public sector. reduce Economic growth.
This is David R. From Henderson, “Inflation Reduction Act Will Raise Taxes for Most People,” TaxbytesPublished on August 3, 2022, by the Institute for Policy Innovation.
Fortunately, the Joint Committee on Taxation (JCT) has done its job, estimating tax increases for people in every income group.
The $54.3 billion tax increase for 2023, the JCT estimates, would not increase taxes for anyone with income between $0 and $30,000. But JCT also notes that its measure of income includes not just adjusted gross income but also employer contributions to health insurance, the employer’s share of Social Security taxes (FICA), and the insurance cost of Medicare benefits. So millions of people with adjusted gross incomes below $30,000 will pay slightly more in taxes.
Individuals with incomes up to $75,000 will not pay more. But people with incomes between $75,000 and $100,000 will see their average tax rate rise from 15.8 percent to 16.0 percent. The average tax rate for people making between $100,000 and $200,000 will rise from 19.1 percent to 19.4 percent, and between $200,000 and $500,000 will rise from 24.1 percent to 24.4 percent.
Read the whole thing, which is quite difficult.