Democrat Tax Hikes to Hit Manufacturers Hardest
The Joint Committee on Taxation (JCT) found that the Democrats’ inflation reduction bill would hit manufacturers hardest with the legislation’s corporate minimum tax.
Senate Democrats will likely bring to the floor this week the Inflation Reduction Act, a reconciliation bill that Democrats hope to enact climate change programs and extend enhanced Obamacare subsidies by raising taxes.
The JCT found that setting a 15 percent corporate minimum tax, which would reportedly raise $313 billion, would especially soak America’s ailing manufacturing sector.
The nonpartisan tax analysis committee found that the manufacturing sector would take 49.7 percent of the share of the Democrats’ proposed tax if the legislation were to pass, including chemical manufacturing, transportation equipment manufacturing, and other parts of the manufacturing industry.
Democrats, led by Sens. Joe Manchin (D-WV) and Chuck Schumer (D-NY), would tax the manufacturing sector at a time when American factory orders have fallen for the second straight month.
The Institute for Supply Management’s index of new orders fell 1.2 percent to a score of 48. S&P Global Market Intelligence’s latest survey found that new orders for goods also slowed for the second month in a row, signaling the lowest level in two years.
Chris Williamson, the chief business economist for S&P Global Market Intelligence, explained:
The rising cost of living is the most commonly cited cause of lower sales, as well as the worsening economic outlook. Companies are also taking an increasingly cautious approach to purchasing and inventories amid the gloomier outlook, and likewise appear to be cutting back on investment, with new orders falling especially sharply for business equipment and machinery in July.
The JCT analysis is not the first study to pour cold water on the benefits, or lack thereof, of the Inflation Reduction Act.
The highly influential Penn Wharton Budget Model found that the inflation reduction bill would likely have zero impact on inflation.