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THE Inflation Reduction Act (IRA) is really a package of green Democratic policies aimed at central planning of the economy by the state on Green New Deal terms. It is a hypocritical legislation which would only worsen inflation by impoverishing workers and the middle class through the increase of taxes on everyone, and by launching a flood of tax audits while prices soar.
According to the Wall Street Journal, with this package, the federal government will spend at least $369 billion on climate and energy programs, including tax credits for both electric and hydrogen vehicles and home energy efficiency improvements, all of which depend on more and more raw materials imported from China. In addition, the package will punish oil and natural gas with taxes, now or in the near future, ultimately increasing the tax burden on the poor and middle class.
Raising taxes when consumer prices for food, energy, and many other necessary goods and services become more expensive does not especially affect the wealthy, but it severely hits the finances of middle and working-class families who will be forced to choose between food, gasoline, or rent. In fact, 42% of Americans already have such financial difficulties and the Democrats in Congress and the White House are bent on impoverishing them further in the name of “mother earth”.
The dream of the new Democratic Party is a population impoverished by an over-regulated economy that weakens real wages, raises prices, takes much more of the little money it leaves in taxpayers’ pockets, drives countless small businesses into bankruptcy, and anchors large corporations to a regulatory deluge accompanied by capricious federal subsidies so that those private profits answer not to the market, but to the government.
The Democrats know that only then will they have a population completely dependent on a Washington that decides when, how much and to whom to hand out, while imposing on Americans what cars they may or may not buy, what health care they may or may not have, and what radical ideology their children will be indoctrinated within public schools.
In that new America, they are trying to create quickly, the squeezed and impoverished common Americans would be forced to buy less, to the point that fast food restaurants would become in a few years a luxury for more than half the country, while countless small businesses go bankrupt and lay off their employees reducing more and more the purchasing power. None of the whimsical handouts offered by Biden would be enough to offset a consumer inflation rate of 8.5%. And it is not because of clumsiness, it is because the real objective is the impoverishment of broad strata of the population so that they depend on politically and ideologically oriented clientelistic transfers.
The fact that the IRS is receiving 80 billion dollars to hire 87,000 new agents for an avalanche of audits makes it more than clear who the weapon of an IRS as politicized and ideologized as the current FBI is aimed at. It is not aimed at large corporations, which can pay armies of lawyers and accountants, but at medium and small businesses that cannot afford lawyers to defend themselves and have to accept any fine, but, above all, at families earning less than $400,000 a year, to whom Biden promised they would not pay more taxes.
And some large companies will receive, through subsidies, a good part of the money that will come from the impoverished taxpayers. And no one would be surprised if they turn out to be Democratic campaign donors. Because conservatives, rich or not, are already the political target of audits and confiscations by a government that began by calling parents who care about their children’s education “domestic terrorists” and has escalated to declaring a profoundly anti-American ideological war on more than half the country.
Guillermo Rodríguez is a professor of Political Economy in the extension area of the Faculty of Economic and Administrative Sciences at Universidad Monteávila, in Caracas. A researcher at the Juan de Mariana Center and author of several books // Guillermo es profesor de Economía Política en el área de extensión de la Facultad de Ciencias Económicas y Administrativas de la Universidad Monteávila, en Caracas, investigador en el Centro Juan de Mariana y autor de varios libros