E.J. Antoni on November 3, 2022
The White House recently released a statement on Republicans’ plan to roll back the president’s inflationary agenda. Ironically, the White House asserts that undoing the very policies which helped spawn inflation will somehow cause more inflation. Here are the five allegations from the White House and why each is dead wrong.
- “$3 trillion in tax cuts skewed to the wealthy – which would add to the deficit and make inflation worse”
The Tax Cuts and Jobs Act reduced personal income tax rates on almost everyone, even people earning less than $10,000 a year. That’s hardly a tax cut skewed to the wealthy. Additionally, the state and local tax deduction, used primarily by the wealthy, was limited by the tax law, which resulted in many high-income earners paying more, not less. Those tax cuts are set to expire in 2025 and will result in middle-income earners seeing a tax increase if Biden gets his way.
- “Raising prescription drug costs for millions of seniors”
The ironically named Inflation Reduction Act (IRA) set Medicare prices for some drugs to a certain percentage of the price for those drugs in the private marketplace. By indexing the one price to the other, that legislation only incentivizes drug-price increases in the private marketplace in order to maintain prices paid by Medicare.
Instead of saving Americans on their prescriptions, this creates even higher prices for millions of Americans. Repealing this provision would reduce drug prices, not raise them.
- “Increasing health insurance premiums”
The Biden administration has drastically expanded Obamacare subsidies, so that people can qualify for government assistance regardless of their income, if they spend a certain portion of that income on their premiums. That means a family of four in West Virginia with an annual household income over $600,000 receives government assistance.
The wealthy should not be receiving subsidies, and rolling back this provision would not even affect anyone with an income three times higher than the poverty threshold.
- “Increasing energy bills in 2023 and beyond”
The IRA provided subsidies for electric vehicles and solar panels while levying higher taxes on oil and gas. Those taxes directly increase energy bills for Americans, while the subsidies go disproportionately to the wealthy. It is not the average American who can afford a $70,000 electric car or solar panels for their home.
These “green” energy tax credits are another handout to the wealthy while the higher taxes fall on those who can least afford them. Repealing these provisions would decrease, not increase, the average American’s energy bills.
- “Increasing student loan payments”
Those who borrowed money are obliged to repay it. The taxpayer should not be on the hook for someone else’s decision to get a degree, which usually enables the person to earn a higher income. Biden’s unconstitutional student loan bailout would give up to $40,000 to a household making a quarter million dollars a year. This is yet another subsidy to higher-income earners at the expense of lower- and middle-income earners.
In fact, the only demographic group whose earnings have outpaced inflation under Biden has been college graduates. Blocking this executive power grab, whether through the courts or legislation, would not only uphold the constitution but protect the property rights of the middle class.
E.J. Antoni is a research fellow for regional economics in The Heritage Foundation’s Center for Data Analysis and a senior fellow at Committee to Unleash Prosperity.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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