Facing a predicted loss of their slim congressional voting advantage in November midterm elections, Democrats are pushing to enact massive tax and spend agendas by a last-ditch blitz of legislative fantasies, furies and fiat of brute force.
Or as Rhode Island Sen. Sheldon Whitehouse tweeted on July 14: “it’s now time for executive Beast Mode.”
Here are just a few of this mendacious menagerie of monsters.
The Inflation Acceleration Act:
According to a hallucination hatched by Democratic/Socialist Sens. Bernie Sanders and Elizabeth Warren along with Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi, a new package of $739 billion in tax increases and $344 billion in new spending will somehow reduce four decade-high 9.1% inflation.
If true, how do they explain why the $1.9 trillion in 2021 American Rescue Plan congressional spending over the 10 years - on top of $3 trillion previously earmarked in five 2020 bills for COVID relief — isn’t already doing that deflationary magic trick.
Then add to that, a $1 trillion infrastructure boondoggle, of which $369 billion of that green corporate welfare bill provides generous tax credits for spending on “sustainable” wind and solar systems and electric vehicle charging stations.
Green Energy Unicorn Fodder:
The justification for that climate-crisis-premised green spending is premised upon a delusional notion that America — and the world — can be forced to achieve net-zero energy emissions by 2050 through regulatory penalties on fossil fuel and subsidies for electric vehicles (EVs).
A McKinsey & Co. report shows that doing so would require nearly $6 trillion in new spending globally every year — roughly equal to one-third of all tax receipts by every government in the world.
Even if that were possible, it wouldn’t resolve the severe economic costs of energy supply volatility throughout the transition, particularly for the poor.
Meanwhile, fossil energy accounted for 82% of global energy consumption last year, with demand (including coal) predicted to grow as a billion-plus humans seek to rise from poverty.
Incidentally, before you purchase that new Tesla, consider that it will consume four times as much electricity as you will need for home air conditioning in a warming world.
Back Door EV Mandate:
The Biden administration’s EPA has set exceedingly stringent emissions standards, giving auto makers a choice between making more electric vehicles — which the feds deem to have zero emissions though they run on electricity generated by fossil fuels — and buying compliance credits from companies like that expensive Tesla.
These EPA greenhouse gas vehicle standards mirror the Obama administration’s Clean Power Plan (CPP), which also set infeasible CO2 limits for power plants that effectively compelled fossil fuel generators either to build solar or wind farms or to subsidize their green energy competitors.
The good news here, is that in West Virginia v. Environmental Protection Agency, the Supreme Court struck down CPP. In doing so, the justices instructed lower courts to look skeptically on administrative agency claims to divine “in a long-extant” a transformative power Congress never expressly delegated … bad news for the beast.
Corporations as Tax Blinds:
Elizabeth Warren has said her party should start with a budget reconciliation deal that raises taxes on businesses so they finally “pay their share to fund vital investments in combating climate change and lowering costs for families.”
These, Warren claims, must include price controls aimed at “stopping companies from jacking up prices” and stopping oil and gas companies from making “gobs of money off this energy crisis.”
One problem with that reasoning is that corporations don’t really pay taxes. Instead, they essentially act as tax collectors which they pass on to service recipients and consumers. The burdens and losses also weigh heavily on shareholder profits, including retirement accounts.
Proposed new Democrat tax increases on businesses will discourage investment while the Federal Reserve is also raising business costs and the economy is in recession. There’s little wonder then that the Joint Committee on Taxation found average 2023 tax rates would increase for nearly every income category.
IRS Warfare Weaponization:
A pact between Democrat West Virginia Sen. Joe Manchin and Chuck Schumer includes $80 billion in new funding for the tax man. Democrats claim this “investment” will yield more than $200 billion in revenue.
That amounts to increasing the current IRS $12.6 billion annual budget by more than six times, with earmarks of $45.6 billion for “enforcement,” including litigation, criminal investigations, investigative technology, digital asset monitoring, and a new fleet of tax-collector cars.
The result will be far more audits, civil suits and criminal referrals, with main targets being the middle- and upper-middle class because that’s where the money is.
The Joint Committee on Taxation, Congress’s official tax scorekeeper, says that from 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year. Only 4% to 9% would come from those making more than $500,000.
Many of these are small businesses that will settle with the IRS, rather than fight and endure years of costly litigation.
All of this is lends itself to increasing politization of the agency along lines of notorious 2013 Lois Lerner targeting of conservative nonprofits for special scrutiny, and illegally leaked confidential private tax information obtained and published by the left-leaning ProPublica website in 2021.
The Buy Back Joe Manchin Deal:
Adding inflationary injury to fiscal ignorance, all that proposed Democrat spending splurge will violate a fundamental time-proven tenant that Joe Manchin once supported when he said, “I don’t think during a time of recession you mess with any of the taxes or increase any taxes.”
As for economic benefits, the Penn Wharton Budget Model it is said that he watches found no net deficit reduction until 2027. It says, “The impact on inflation is statistically indistinguishable from zero.”
Even more ironically, the non-profit Tax Foundation forecasts that Manchin’s Schumer deal will bite his home state among the hardest with higher coal industry taxes.
Think it over carefully Joe, before your pivotal vote releases those hungry budgetary beasts to devour West Virginia’s economic future.
Larry Bell is an endowed professor of space architecture at the University of Houston where he founded the Sasakawa International Center for Space Architecture and the graduate space architecture program. His latest of 12 books is "Architectures Beyond Boxes and Boundaries: My Life By Design" (2022). Read Larry Bell's Reports — More Here.
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