The Schumer-Manchin reconciliation bill, falsely titled the "Inflation Reduction Act," is really a pathetic piece of legislation. It is the ultimate big government socialism bill. It defines the Democratic Party as the radical left. There is no inflation reduction.
There are no incentives for growth or prosperity. It punishes successful people. It intensifies the war against fossil fuels. It adds to the war against the rest of business and industry. It increases the regulatory state that defines "modern socialism" and it furthers the Democratic campaign to end free-market capitalism.
There is not one good thing in this bill. The biggest winners are regulatory agencies like the EPA and the IRS, Medicare price controls and special interest rent-seeking corporate handouts. This bill has the potential to increase inflation and deepen recession. It will not reduce deficits or debt. This bill has no common sense. This bill is dumb — very, very dumb.
There's a thousand details that we don't yet know everything about and more will be revealed with our guests tonight, Senator Rob Portman and Ranking Republican Budget leader, Congressman Jason Smith. They'll be on in a moment.
My biggest concern is the big government socialism aspect of the huge growth in the federal government, and its regulatory octopus tentacles manipulated by left-wing bureaucrats, who in many cases can never be replaced without major governmental reforms.
The IRS is the best example, with an $80 billion budget increase and a doubling of its agents to go out there and chase down Uber drivers, the gig economy, small businesses, waitresses and pretty much anything that moves.
The basic Democratic assumption behind the massive IRS expansion is that successful people are cheating the system. They're all tax cheats. They're evil. They sit around conniving how to not pay taxes; like Elon Musk, who paid $11 billion in personal taxes last year, but presumably the new IRS will descend on him like locusts.
You see, Democrats have come to believe, as Obama said years ago, that "you didn't build that" on your own. That our economic system doesn't work without government management through taxing, regulating, spending, borrowing, money-printing. Entrepreneurs don't exist in the Democratic Party model and if they do, they're not paying their fair share and their success must be redistributed, Soviet-style. Let's make everybody equally poor, except of course the wealthy Democratic politicians who milk the system for all it's worth.
Know what the problem with the IRS tax cheat idea is? The tax system designed by Congress is impenetrable and indecipherable. Line up ten tax accountants and none of them will agree on crucial tax provisions. That's the problem. It's not tax cheats. It's terrible government tax policy.
A nice simplified low flat tax rate system would eliminate the need for 150,000 IRS agents and what's incredible on this topic is that, once again, the Congress in this session has significantly increased the number of tax credits, refundable credits, deductions, carve-outs, all sorts of political favors and corporate welfare, which will make the tax code immensely more complex and indecipherable.
In other words, "there they go again" and once this revenue grab fails, maybe the next Congress will ask for another 80,000 IRS agents.
The whole IRS story epitomizes what is wrong with the DC swamp, and Congress, and the Executive Branch, and the massive regulatory state that is to be foisted on ordinary Americans.
The EPA bureaucracy is another big winner, with vast new powers. The healthcare bureaucracy is another big winner, with vast new powers.
You know who's not a big winner in this bill? Smart young men and women who come up with brilliant new ideas that turn into massive new advanced technologies, inventions or innovations. Their entrepreneurship will be punished — not rewarded — by taxes or rules and regulations or inflation.
The dopey dopes that spawned this stupid bill do not understand incentives to work, invest, create and take risks. Tax or regulate something and you get less of it. That's what these dummies have done. Less growth, less prosperity, less liberty, less freedom, less happiness, but I think I know something they don't.
The cavalry is coming. This bad stuff can all be overturned. In the name of freedom, let's hope it is.
This article is adapted from Larry Kudlow's opening commentary on the August 8, 2022, edition of "Kudlow."