It is good when a political party does things that are popular and are likely to make the world better.
The "Inflation Reduction Act" is big and complicated. It needs explanation.
Let's start.
Most of what the public knows about the new law is that it is complicated, that every Republican voted against it, and that Joe Manchin and Kyrsten Sinema finally agreed to it. The law is so wide-ranging that it is hard to sell, and easy to mischaracterize. We know it is expensive and controversial. But what is in it that is good?
One good thing is that it includes $80 billion to bring IRS staffing back up to its prior staffing and audit levels. Currently the largest corporate and individual taxpayers face a 2% chance of audit. Honest taxpayers are currently shouldering the weight of tax cheats. The new law increases tax compliance and raises money while doing so.
This provision faces criticism. Ted Cruz's comments on that are typical, voiced in a fundraising appeal sent to me this week:
And leave it to the Democrats to pile on with their Big Government STUPIDITY...
They want to spend $80 billion over the next decade to DOUBLE the size of the IRS. They want to hire 87,000 new agents & triple the number of audits the agency can perform. . . .
This new army of IRS agents will be coming after the middle-class and small business owners. Once again, the Democrats want to use our own government to punish us! . . .
My position is clear: Derailing this scheme isn’t enough – We need to ABOLISH the IRS!
This is a broken agency that can’t even answer the phone when taxpayers need help, and has been weaponized by the left time and time again to target conservatives!
Take a stand to stop this insanity and GET THESE LUNATICS OUT OF POWER.
The IRS is, indeed, a broken agency that can't even answer the phone when taxpayers need help. It doesn't need de-funding. It needs adequate funding again.
Starving the IRS has been policy of the GOP. Taxpayer compliance for large, complicated returns has essentially been on the honor system. Citizens read news stories that the largest businesses and wealthiest people pay no taxes. It sends a message that normalizes tax cheating. Trump famously noted that he paid no taxes for many years and credited it to being "smart." Tax scofflaws take a very "aggressive" tax posture, counting on a very low chance of an audit.
The new law makes that riskier. It targets taxpayers and businesses with incomes over $400,000 a year. There is a practical reason for that. People with large incomes from businesses have tax returns that are complicated enough that "aggressive" tax postures are possible and the recovery of taxes owed is meaningful. There is a political reason, too. There is bi-partisan resentment that the rich appear to get away with lawbreaking and the "average guy" is picked on. Cruz claims the new law will continue this. The intent of the law is to do the opposite.
People who cheat on their taxes may oppose this provision of the new law. Honest taxpayers, and people who expect others to be honest, have reason to be happy with the law, if they know what is in it. Honest taxpayers subsidize cheaters.
Democrats need someone to communicate that message with as much clarity and vigor as Cruz and others like him communicate theirs. Normally that would be the job of the president. Biden showed he has legislative skills by getting this bill passed. I had underestimated Biden. Still, the job of persuasive, vigorous communication is not Biden's strength. I am hopeful potential Democratic successors to Biden step up to play that role.
I expect to continue unpacking the new law. Future posts include:
1. The law added the definition of carbon dioxide as an "industrial pollutant." This tiny change fixed the Supreme Court's decision in West Virginia vs. EPA which limited the EPA's ability to regulate power plant emissions.
2. The bill continues funding for Medicaid expansion under the Affordable Care Act, so that the working poor have health insurance.
3. The bill puts America on an even footing with other countries in having a 15% minimum tax on corporations.
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7 comments:
"It doesn't need de-funding. It needs adequate funding."
This is the antithesis of the " big government - bad" trope. Not allocating sufficient resources to any effort, will cripple it, and give critics ammunition.
Republicans only represent the wealthy, and I mean the very wealthy. You may have heard that a rich right winger just gave 1.2 Billion to Republicans, and used a non-profit tax dodge to do it.
He'll get his money's worth.
I’m afraid that unless Democrats improve their messaging, this bill could wind up like “Obamacare”: Nobody likes the bill, they just like what’s in it.
The new law's prospective financial benefits over several years, even if ever actually realized, are already largely erased in one fell swoop with President Biden's latest student loan repayment deferral announcement later today, plus 10K per borrower loan "forgiveness" (read: transferred responsibility to those who work or did work for a living).
"I had underestimated Biden". President Obama famously warned us against underestimating Joe's abilities...
The following is merely a portion of a response I gave to a friend on Facebook well back in 2018 ...
"Social rights" is of course "Individual rights" because the one and only way to ensure the rights and privileges of all of society is to secure the Eternal Rights of the Individual. The social rights you seek are already fully enshrined in our Bill of Rights, ...with the obvious exception of the 16th abomination to the bill of rights. As you know the bill of rights was insisted upon by the People to ensure the security of the People AGAINST government overreach. The 16th amendment is such an over reach. The very wording essentially reads that the government does not have to pay any attention to the States and can directly tax the people. I am very surprised that the last sentence in the 16th amendment isn't NYAH NYAH NYAAAHHHH!! The 16th amendment literally thumbs its nose at the States, and digs directly into yours and my pockets.
The 13th amendment eradicated slavery as an institution. The 16th amendment enslaved "the People" TO the institution.
Shay's rebellion, the Whiskey rebellion, and yes, the American revolution. All of them, anti-tax rebellions! Of course the Civil War basically put the "United States" into a death spiral, and laid the foundation for "American Empire" and that is probably why you(and billions of others! I myself up until just a few years ago when I pulled my head out of my butt and saw the light!) are so brainwashed, yes, brainwashed(!!) into believing that an income tax is a civic responsibility. It is only to keep the beast fed for its world wide rambling and oppression.
I believe quite strongly that anyone who believes in the chains of an income tax is fully complicit in American imperialism, and has no right to complain of its reckless manner."
... and here is another quick quip:
"The 16th amendment is a gross overstep of federal authority and is an abomination to the Bill of (the PEOPLE'S, NOT the government's)Rights. It is a clear example of marxist progressive antipathy towards the United States Constitution and the entire western liberal tradition."
...
I have many more where that comes from, the point is we must absolutely repeal the 16th Amendment to the Constitution given during the Wilson Administration.
Woodrow Wilson, the Democrat darling of progressive racism. The progenitor of the first, but clearly not the last, Senile presidency whose administration was run clandestinely by his unelected wife.
... perhaps next we'll talk about the literal Pandora's Box that was open through the 19th Amendment, or we can maintain a light step by just discussing the demagogic confusion forged by the 17th Amendment. Oh, and Peter, the 18th Amendment is in no way whatsoever the same as Roe v Wade and remember the 18th Amendment was ferociously instigated by the "Women's Christian Temperance Movement."
I live in Ashland just so you know.
Since it was mentioned that a wealthy Republican entity just received a large donation, it might be useful to mention the other entities that receive large donations and bequests.
They're not all R supporters; many are D, Progressive, and non-partisan as well. For example, George Soros' Open Society Foundation which has affected the prosecution of crimes in many cities - less, rather than more.
Leonard Leo's Marble Freedom Trust was the recipient of $1.6B from longtime conservative donor Barre Seid from the proceeds of the sale of his Tripp Lite company to an Irish conglomerate.
Mr. Leo commented (from the New York Times):
“It’s high time for the conservative movement to be among the ranks of George Soros, Hansjörg Wyss, Arabella Advisors and other left-wing philanthropists, going toe-to-toe in the fight to defend our constitution and its ideals,” Mr. Leo said.
For perspective, the $1.6 billion that the Marble trust reaped from the sale is slightly more than the total of $1.5 billion spent in 2020 by 15 of the most politically active nonprofit organizations that generally align with Democrats, according to an analysis by The Times.
It's not likely that Mr. Leo will spend it all this year.
I'm not sure of the provenance of all the funds received by the Open Society Foundations and other entities in Leo's quote, nor what tax advantages the donors may have used.
I believe it's called "Bread and Circuses" paid for by the blood, sweat and tears of the very attendees. It was also stated by the proponents that it would never go above 1%.... and then they sped off in their clown car.
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