{"database": "press", "table": "releases", "rows": [["https://www.crapo.senate.gov/media/newsreleases/myth-vs-fact-tax-title-of-the-inflation-reduction-act-of-2022", "MYTH vs FACT: Tax Title of the \u201cInflation Reduction Act of 2022\u201d", "2022-08-01", "2022", "2022-08", "Republican", "Senate", "ID", "Mike Crapo", "C000880", "www.crapo.senate.gov", "crapo", "https://www.crapo.senate.gov/media/newsreleases", "scraper", "Democrats claim the latest version of their tax-and-spend bill, the mislabeled \u201cInflation Reduction Act of 2022,\u201d will ensure the wealthiest Americans and corporations pay their \u201cfair share\u201d by closing tax loopholes and boosting IRS funding, all without raising taxes on anyone making less than $400,000 per year. However, analyses from nonpartisan experts show the legislation would raise taxes on low- and middle-income Americans during a period of declining GDP and high inflation; raise taxes on manufacturers, exacerbating supply-chain disruptions, and costing U.S. jobs and investment; and do little to nothing to lower inflation.\n\n\u201cThe more this bill is analyzed by impartial experts, the more we can see Democrats are trying to sell the American people a bill of goods,\u201d said U.S. Senate Finance Committee Ranking Member Mike Crapo. \u201cNon-partisan analysts are confirming this bill raises taxes on the middle class, raises taxes on manufacturers, and produces no meaningful deficit reduction when gimmicks are removed and the full cost is accounted for.\u201d\n\nAccess this document here.\n\nIRS FUNDING\n\nMYTH: Increasing IRS funding by $80 billion will provide the agency with the resources it needs to go after wealthy tax cheats and corporations who don\u2019t pay their fair share in taxes, generating more than $124 billion in additional revenue to go toward deficit reduction.\n\nFACT: According to the nonpartisan Joint Committee on Taxation (JCT), the brunt of any new revenue from hiring an army of IRS auditors will overwhelming hit low- and middle-income earners, people already struggling with high gas prices and 9.1 percent inflation. CBO scores the $80 billion for mandatory IRS funding as spending only, and gives phantom credit for potential enforcement revenue that might be generated in \u201cfuture baselines.\u201d\n\nBackground:\n\nIRS funding breakdown\u2014$80 billion in mandatory appropriations to the IRS:\n\n$45.6 billion for enforcement purposes\n\n$25.3 billion for operations support\n\n$4.8 billion for business systems modernization\n\n$3.2 billion for taxpayer services\n\nHow will the $45.6 billion for enforcement purposes be used to address the noncompliance tax gap?\n\nAccording to the nonpartisan Joint Committee on Taxation, misreported trade or business activities (Schedule C items) or other income-producing activities (Schedule E items) make up a very significant portion of the overall noncompliance \u201ctax gap.\u201d\n\nIRS data reproduced in the table below show that Schedule C or E tax enforcement assessments predominantly hit taxpayers who have low (or very low) Adjusted Gross Income (AGI), and nothing in the proposal would change that fact.\n\nBased upon these data, out of all the revenue projected to be raised from underreported income:\n\n40-57 percent could come from taxpayers making $50,000 or less;\n\n65-78 percent from those making less than $100,000; and,\n\n78-90 percent from those making less than $200,000.\n\nOnly around 4-9 percent could come from those making $500,000 or more.\n\nReferring to all tax gap and misreporting numbers as arising from \u201ctax cheats\u201d is misdirection, as significant amounts arise from hard-working taxpayers simply struggling to comply with an overly complex tax code, which will become even more complex if the latest tax-and-spend bill becomes law.\n\nBOOK MINIMUM TAX\n\nMYTH: The book minimum tax (BMT) does not raise taxes; it closes loopholes by making large companies pay at least a 15 percent minimum tax.\n\nFACT: The BMT is a $313 billion tax increase, with half of the increase falling on manufacturers, according to the nonpartisan Joint Committee on Taxation. Despite proponents\u2019 claims, the book minimum tax does not close tax loopholes. The BMT is calculated based on financial statement (\u201cbook\u201d) income, which is a different set of rules established for an entirely different purpose than taxable income.\n\nClaims that the BMT closes loopholes ignore the fact that the provisions resulting in different book and tax treatment were specifically enacted by Congress for sound policy reasons. For example, the treatment of capital investments differs for book and tax purposes, in part to encourage companies to invest in capital assets in the United States. As the left-leaning Tax Policy Center acknowledges, the BMT would discourage investment.\n\nAccording to a study by the National Association of Manufacturers, in 2023 alone the effects would include:\n\nA real GDP reduction of $68.45 billion\n\n218,108 fewer workers in the overall economy\n\nA labor-income decrease of $17.11 billion\n\nFurther, the BMT will not prevent large companies from paying zero tax. The energy tax provisions included in the \u201cInflation Reduction Act of 2022\u201d would permit companies to receive those tax credits in excess of their tax liability. In other words, not only will companies in Democrat-favored industries be able to pay zero tax, some will even be able to receive taxpayer-funded subsidies in excess of tax due for engaging in an activity that has been picked for government handouts.\n\nBackground:\n\nThe book minimum tax is calculated based on book income, or the income reported by companies on their financial statements. Companies calculate their tax liability based on the tax accounting rules set forth in the Internal Revenue Code. While book accounting is typically based on Generally Accepted Accounting Principles (GAAP), there is no globally uniform financial accounting standard. Further, U.S. accounting rules are set by the unelected Financial Accounting Standards Board (FASB), whereas the Internal Revenue Code is enacted by Congress per its authority under the Constitution. The book minimum tax unwisely injects tax policy\u2014and politics\u2014into the accounting standard setting process.\n\nA key difference between book accounting and tax accounting is the treatment of companies\u2019 investments in capital assets, like machinery and equipment. For book purposes, companies write off the value of their capital assets in line with their decline in economic productivity. For tax purposes, the cost of most capital assets, including machinery and equipment, can be fully deducted. The book minimum tax would penalize companies that utilize the tax treatment related to these investments, encouraging manufacturers and others to invest elsewhere.\n\nJCT has confirmed that half of the $313 billion BMT increase would fall on manufacturers, targeting the very capital investments Congress intended to encourage amidst an economy in stagflation. Despite claims, depreciation is not a tax loophole. This provision is a tax increase\u2014one that falls squarely on domestic manufacturing.\n\nContrary to closing loopholes, a book minimum tax would actually pick new \u201cwinners and losers,\u201d as some provisions receive particularly special treatment under the BMT\u2014namely, companies receiving refundable energy tax credits. Not only would those companies not be penalized for paying zero tax as a result of receiving energy tax credits, but they would also receive an adjustment to eliminate the subsidy from income under the BMT, further ensuring they pay no additional tax.\n\nDemocrats should take a cue from the past. A previously enacted book minimum tax was allowed to expire in 1989 (after only three years in place) due to the problems outlined above. In other words, this proposal has been tried before\u2014and it failed.\n\nTAX HIKES ON FAMILIES MAKING LESS THAN $400,000 PER YEAR\n\nMYTH: There are no new taxes on families making $400,000 or less and no new taxes on small businesses\u2014Democrats are simply focused on \u201cthe rich\u201d by closing evasive tax loopholes and enforcing the tax code.\n\nFACT:The JCT estimates the legislation will increase taxes on millions of individuals making less than $400,000 per year.\n\nAccording to the JCT, the bill would raise a total of $337.8 billion over 10 years from its three revenue-raising provisions:\n\nBook Minimum Tax: $313.1 billion\n\nChange to treatment of carried interest: $13 billion\n\nReinstatement of Superfund tax: $11.7 billion\n\nThe JCT estimates the following tax effects:\n\nIn 2023, taxes will increase by $16.7 billion on American taxpayers earning less than $200,000\u2014a nearly $17 billion tax targeted directly at low- and middle-income earners next year, amidst stagflation.\n\nThe $17 billion hit alone is confirmation that the Biden pledge to not raise taxes on anyone earning less than $400,000 is shattered by the latest tax-and-spend bill.\n\nThe proposal would raise another $14.1 billion from taxpayers earning between $200,000 and $500,000.\n\nAccording to JCT data, 98 percent of all tax returns filed by those in the $200,000 to $500,000 category are filed by those earning between $200,000 and $400,000, with at least three-fourths of the income in the $200,000 to $500,000 category also coming from those below $400,000. This means it is likely that at least half of all new tax revenue raised next year would come from those earning under $400,000.\n\nThroughout the ten-year window, the average tax rate for nearly every single income category would increase.\n\nBy 2031, when the new green energy credits and subsidies provide an even greater benefit to those with higher incomes, those earning below $400,000 are projected to bear as much as two-thirds of the burden of the additional tax revenue collected that year.\n\nBackground:\n\nAs outlined above, the book minimum tax is not a loophole closer\u2014it\u2019s a direct tax on America\u2019s manufacturers and actually creates new \u201cwinners and losers\u201d in the tax code.\n\nSignificantly changing the carried interest deduction increases taxes on private investment, which will increase costs to businesses, eliminate jobs, decrease returns to average Americans who benefit from these investments, and dis-incentivize long-term investment.\n\nReinstating the superfund tax on America\u2019s producers would result in higher prices for consumers on things like gasoline, threaten thousands of jobs, and undermine domestic critical mineral development.\n\nTaken together, the JCT estimates the latest version of the full tax title will increase taxes on millions of Americans across every income bracket, with more than half of the tax increases on Americans making less than $400,000 per year.\n\nCorporate tax increases get passed on to workers in the form of lower wages and to consumers in the form of higher product prices. Some estimates say up to 50 percent of a corporate tax increase is borne by workers. Other estimates say 31 percent is borne by consumers via price hikes; 38 percent is borne by workers via lower wages; and 31 percent is borne by owners. These owners include individuals with retirement savings, with costs occurring via lower equity valuations, fewer dividends, and reduced opportunities for organic growth through investment.\n\n###", 1, "2026-03-30T01:40:41Z", "2026-04-08T02:59:24Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://www.crapo.senate.gov/media/newsreleases/myth-vs-fact-tax-title-of-the-inflation-reduction-act-of-2022"], "units": {}, "query_ms": 1.394025981426239, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}