The Wall Street Journal editorial board recently published a scathing piece criticizing the reconciliation bill struck between Senate Majority Leader Chuck Schumer and Senator Joe Manchin, D. W. Va. The editorial article, “The Schumer-Manchin Tax Increase on Everyone,” argues that the “Inflation Reduction Act” will make Americans poorer and harm the economy.
“Majority Leader Chuck Schumer wants a Senate vote on his partisan tax deal with Joe Manchin as early as this week, and no wonder he wants to rush it through,” wrote the board. “The more Americans learn what’s in this tax-and-spend behemoth, the more they’ll dislike it.”
The board continued, “Their Senate bill hits U.S. manufacturing especially hard, and it raises taxes on Americans making less than $400,000 a year.”
The board agreed that the pending legislation might help ease inflation but at the high price of the economy going into recession. “The $327 billion in new taxes could slow inflation if the economy falls into recession, and that may be the quiet expectation. The tax increases on business will discourage investment while the Federal Reserve is also raising business costs with higher interest rates. But tax policy should be working in the opposite direction to encourage investment when the Fed is tightening, and the economy is close to recession.”
Taxes will increase for many Americans
The board further noted that the legislation would cause the most farm to domestic manufacturers while citing a report from the non-partisan Congress Joint Committee on Taxation. According to the report, 49.7% of the tax will fall on domestic manufacturers. The bill would also break President Joe Biden’s campaign pledge during his 2020 presidential run, taxing Americans making less than $200,000.
“Taxes will rise by $16.7 billion in 2023 on Americans earning less than $200,000 a year. Taxpayers earning between $200,000 and $500,000 will pay $14.1 billion more,” wrote the board. “This gives the lie to Democratic claims that no one earning under $400,000 will pay more taxes under the bill, a promise Mr. Biden also made in his campaign. The reality is that the Schumer-Manchin bill is a tax increase on nearly every American,” it continued.
The Journal board warned bill supporters how new taxes on businesses and workers would unlikely be popular and that they would be “responsible” for the legislation’s economic repercussions. In the scorching piece, the Journal board wrote that bill supporters “will be responsible for the economic consequences,” and “their new tax on workers is unlikely to be a political or economic winner.”