President Joe Biden said after signing the Inflation Reduction Act that no Americans making less than $400,000 per year will pay more taxes despite the legislation giving the IRS a massive cash injection for enforcement, prompting a flurry of criticism that Biden’s pledge holds no water and that the tax agency will squeeze middle-income households harder.
Biden said at an Aug. 16 signing ceremony at the White House that the legislation will be one of the “most significant laws in our history” and that households earning less than $400,000 per year will “not pay a penny more” in federal taxes.
But skepticism runs deep regarding Biden’s claim, especially among Republicans.
“Today, amidst record inflation and after entering a recession, Joe Biden signed a bill which: continues reckless spending, raises your taxes, expands IRS audits, fails to tackle inflation,” Rep. Nancy Mace (R-S.C.) said in a statement, noting that “Biden pinky promises” that the Inflation Reduction Act won’t have any of the impacts she listed.
‘Higher Taxes, Higher Energy Bills, Aggressive IRS Audits’Democrats argued during a debate last week on the House floor that the Inflation Reduction Act would bring much-needed relief from soaring prices by lowering costs for U.S. households.
Schumer said the measure “will lower costs for middle-class families, close tax loopholes for the rich and big corporations, take the most significant action ever to fight the climate crisis, and create good-paying jobs.”
Republicans, none of whom supported the reportedly $740 billion legislation, have panned the measure as inflationary.
“Democrats robbed Americans last year by spending our economy into record inflation. This year, their solution is to do it a second time. The partisan bill President Biden signed into law today means higher taxes, higher energy bills, and aggressive IRS audits,” Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement reacting to Biden signing the measure into law.
Critics have also sounded the alarm over the legislation’s provisions that bolster the IRS with nearly $46 billion in additional funding for enforcement, including hiring more auditors. While the measure doesn’t have specific hiring targets, Republicans have speculated that the money would be used to hire tens of thousands of IRS agents while arguing that their enforcement efforts would target ordinary Americans.
“Today, Biden signed a bill to raise taxes during a recession and unleash 87,000 new IRS agents to audit more Americans like you,” Chad Gilmartin, deputy spokesman for House Minority Leader Kevin McCarthy (R-Calif.), said in a statement.
McCarthy previously expressed a similar view, saying in a statement that “Democrats in Washington plan to hire an army of 87,000 IRS agents” who would go after middle- and lower-income Americans.
Yellen Vows No Increase in Audit RatesDespite the flurry of critical claims that the Democrat-backed inflation legislation will hit Americans earning less than $400,000 per year with more IRS audits, Biden administration officials insist this isn’t the case.
“This means that, contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited.”
‘Almost Certain’ More Audits Are Coming for Middle AmericaBut despite Yellen’s insistence that audit rates won’t jump for those making less than $400,000, Rachel Greszler, a senior research fellow at the Grover M. Hermann Center, wrote in an op-ed for The Heritage Foundation that this likely isn’t the case.
“Despite the Biden administration’s claims, it’s almost certain that households making less than $400,000 a year would face increased audits under Democrats’ bill,” Greszler wrote. “And despite estimates from official congressional scorekeepers that the Schumer-Manchin-Biden tax increase indeed would raise taxes on those Americans, the administration has doubled down on the claim.”
Committee Republicans said the CBO statement they were provided with confirms that, under the new legislation, lower- and middle-income Americans will be squeezed harder by the IRS to the tune of at least $20 billion.
“The CBO confirms that had this amendment passed and lower- and middle-income taxpayers been protected, revenue in Democrats’ bill would have been reduced by at least $20 billion,” Committee Republicans said.
This confirms that “at least $20 billion of the $124 billion in new revenue expected by a supercharged IRS will be coming from higher audits on low- and middle-income Americans” and that this would be “in addition to existing audits on these income levels,” Republicans said.
The CBO didn’t respond to a request by The Epoch Times for confirmation of the scorekeeper’s assessment and comment.