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Setting the record straight on the Inflation Reduction Act I The Hill



This past week, when I left California to go to Washington and vote for the Inflation Reduction Act, I gave both of my young kids a big hug, filled with more hope than ever in my adult lifetime about the future of our country and the planet we are going to leave behind for future generations.

I’m hopeful because the Inflation Reduction Act is going to improve the lives of countless families in the communities I represent and tackle some of the biggest challenges facing our country.

This landmark legislation is going to lower the costs of prescription drugs and health care, fight climate change, lower energy costs, and reduce the deficit without raising taxes on families making less than $400,000. The bill does that by ensuring massive corporations pay their fair share by implementing a 15 percent minimum tax on the largest 150 companies that make more than $1 billion in profits.

Unfortunately, many Republicans are spreading misinformation about this bill out of political expediency, and I believe it’s essential to set the record straight. It’s especially important because the vast majority of the American people support the policies in this bill.

Much of the misinformation has been disproven by independent, nonpartisan fact checkers, but let’s go through it.

First and foremost, this bill does not raise taxes on any families making less than $400,000. As the Associated Press confirmed in a fact check, “nothing in the bill raises taxes on people earning less than $400,000.”

What Republicans are really talking about is the 15 percent minimum tax on the largest corporations. These companies bring in billions of dollars every year and then exploit tax loopholes to avoid paying their fair share. Many line the pockets of my colleagues with huge political contributions. (As an aside, I’m proud to be among the 50 or so members of Congress who don’t take corporate PAC money.)

The source for much of the GOP misinformation comes from a report commissioned by Senate Republicans that only looked at the indirect effects of corporate taxes on shareholders. However, the Republicans’ analysis conveniently ignored all of the benefits that middle-class families and others will receive from tax credits for everything from health care premiums to clean energy upgrades. When you look at the full picture, middle- and low-income families are going to be far better off thanks to the Inflation Reduction Act, and they certainly aren’t going to see higher rates when they go to do their taxes next April.

Second, we’ve heard outlandish theories that the Internal Revenue Service is going to send tens of thousands of armed agents across the country to target middle-class families and small businesses. That’s patently false. The IRS has lost about 50,000 employees over recent years and suffered budget cuts that have made it easier than ever for the massive corporations and the ultra wealthy to evade paying the taxes they owe.

The funding in this bill is going to replace some of those lost employees, upgrade technology, improve customer service, and ensure the very wealthy are paying their taxes — not to mention that if you’re owed a refund, hopefully you’ll now get it in a more timely manner. Treasury Secretary Janet Yellen even directed the IRS commissioner specifically not to increase audits of households making under $400,000 per year. And if that’s not enough, the IRS commissioner — a Republican appointed by former President Trump — said this funding is “absolutely not about increasing audit scrutiny on small businesses or middle-income Americans.”

You pay your taxes. Shouldn’t we do everything possible to ensure billionaires and big corporations pay their taxes as well?

Third, I’ve even heard some refer to the provisions lowering prescription drug costs as “price controls” that will stop the development of new drugs. The reality is that the top pharmaceutical companies spend billions of dollars more on stock buybacks and dividends than they do on research and development. They will still have plenty of money to invest in developing new drugs. It’s long past time to give regular Americans a fair price for the medicines they need.

That’s why the Inflation Reduction Act empowers Medicare to negotiate prices for about 100 of the most expensive drugs, which will save more than $100 billion over 10 years. Nobody I talk to is opposed to cheaper prescriptions.

Finally, some have suggested that the clean energy investments in this bill will help China. Clearly, those making that argument didn’t read the bill or even an objective summary, because it explicitly prevents investments that would support China. For example, to qualify for a clean vehicle tax credit, a car has to be assembled in the United States, and it can’t contain any battery components or critical minerals from adversaries like China and Russia. We specifically wrote the bill to uplift American innovation and manufacturers.

I don’t expect the misinformation around this bill to end any time soon, but it’s important you know the facts. The Inflation Reduction Act is going to lower costs, address the climate crisis, and reduce the deficit without raising taxes on middle-class families, full stop.

Ultimately, you don’t have to take my word for it. Just listen to 126 top economists — including seven Nobel Laureates, two former Treasury secretaries, and two former Fed vice chairs — who said the Inflation Reduction Act “will fight inflation and lower costs for American families while setting the stage for strong, stable, and broadly-shared long-term economic growth.”

That’s the truth about this historic legislation.

Levin represents California’s 49th District, which includes North County San Diego and South Orange County.

Read the article here.

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