Larry Kudlow: These tax hikes slam everybody across the board
Kudlow calls out the Manchin-Schumer bill
Save America. Kill the bill. The more America learns about this Manchin-Schumer special, the less America likes it. More spending will increase inflation. Higher taxes will deepen the recession. That's just common sense.
A new poll in Arizona, which happens to be Sen. Kyrsten Sinema's home state, shows 53% of respondents say that the senator should oppose any major spending bill that includes tax increases.
Only 40% said Ms. Sinema should compromise with Democratic leaders and 50% said they'd be less likely to vote for Sen. Sinema in 2024 if she supports the new spending bill. Fifty-four percent believe major spending and tax hikes would increase inflation. Sixty-three percent say Congress should not increase taxes during a recession.
Sen. Sinema, along with Sen. Manchin, helped kill the $5 trillion bill last winter, but she's on the hot seat right now. Her favorables are only 39%. Her unfavorables, 55%. So, she's upside-down by 11 percentage points. Girl, you got a lot of work to do. Please hurry up and kill the bill.
MANCHIN-SCHUMER BILL WOULD REINSTATE TAX ON IMPORTED OIL AND PETROLEUM PRODUCTS
Just to review the bidding on this bill, according to the nonpartisan Joint Committee on Taxation, people earning less than $10,000 a year will be hit the hardest with a 3.1% tax hike. Those between $20,000 and $30,000 will have a 1.1% tax hike. Those making under $100,000, you'll get a $6 billion tax hike. Under $200,000 will get a $17 billion tax hike.
Everybody gets slammed across the board and these estimates are from the Joint Committee on Taxation staff, which is completely nonpartisan. In terms of slapping on the 15% minimum corporate tax — which creates a monumental tax obstacle to business capital investment, which is so important for innovation, technology advances, real worker wages and typical family incomes — the biggest burden of this $313 billion book minimum tax hike will hit manufacturers by 50% and then spread across all the other sectors between 5% and 13%.
Manufacturers, which by the way includes fossils (including coal), autos, trucks, utilities, steel, and just about everybody else that makes something, corporate profits next year could fall by over $50 billion, so let’s apply some common sense.
Firms making less money will have less money to pay their workforce. That is why jacking up the corporate tax burden hits predominantly middle-income working folks. That is just common sense. That is why this is a very bad bill. This Biden idea that he'll never raise taxes on anybody making under $400,000 is just plain wrong.
Finally, let’s talk about this IRS beast. The Manchin-Schumer bill would add $80 billion, more than six times the current IRS budget of $12.6 billion and of course, more than half of it, $45.6 billion, will go toward enforcement, and who do you think the IRS is going to go after?
Well for starters, they're going to go after small pass-through, subchapter-S businesses. That's right, small businesses that produce the bulk of the jobs and output in the economy. The Joint Tax Committee estimates up to 90% of the so-called underreported income will come from those making less than $200,000 a year — underreported, my keister.
MANCHIN-SCHUMER SPENDING BILL TARGETS TAX LOOPHOLE FAVORED BY INVESTORS
I mean, this agency is sitting on 21.3 million unprocessed returns, with millions and millions of taxpayers waiting to receive refunds or final decisions, and by the way, let me remind you of the name Lois Lerner, who was an Obama political operative put in the IRS to harass conservative groups. You may recall she was run out of town before the dog-catchers could get her.
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The IRS' poisonous tentacles always have a way of reaching out and entangling conservative nonprofits, including religious groups, including pro-life groups. I'm sure that's just a coincidence, right? Wrong.
You know, this country was founded by brave men and women who rebelled against King George III's oppressive taxation without representation. I was there. This IRS beastly power-grab is worse than George III. So, let me be blunt: Save America. Kill the bill.
This article is adapted from Larry Kudlow's opening commentary on the August 3, 2022, edition of "Kudlow."