WASHINGTON, D.C. – Senate Democrats and Republicans are butting heads over a proposed climate and tax bill. Republicans said it would ultimately hurt working families while Democrats argue it will make big changes to the tax code and combat climate change.
“This is really a comprehensive, historic piece of legislation,” said Sen. Chuck Schumer (D- NY).
Last week Senate Democrats unveiled the “Inflation Reduction Act”, a tax and climate deal they agreed to in closed-door negotiations. Supporters of the bill said it would raise more than 700-billion in new revenue by imposing a 15 percent corporate minimum tax for businesses in excess of one-billion-dollar profits, 200-plus billion dollars getting Medicare to negotiate lower drug prices, about 125 billion from strong IRS enforcement of tax law and more.
The Democrats claim these new tax revenue streams will help pay for hundreds of billions towards energy security and climate change as well as spending 64 billion to extend health care subsidies under the Affordable Care Act. Lastly, the bill would put 300-billion towards reducing the deficit.
“Put simply this legislation will save lives, create jobs and reduce costs,” said Schumer.
Some economists said this bill could have a little impact on inflation which is at record levels now. Some argue it could benefit the economy overall. However, in an analysis from the nonpartisan Joint Committee on Taxation, they concluded that the bill would raise taxes on all households since wealthy companies would pass the 15 percent new minimum tax rate onto consumers.
“Increased taxes on the people who create jobs means you’re gonna have less growth, fewer jobs and lower wages,” said Sen. John Thune (R- SD).
Republicans are strongly pushing against this bill.
“They will absolutely devastate American manufacturing and in the process, impose this tax increase on people of ordinary and modest means, it’s a bad plan,” said Sen. Pat Toomey (R- PA).
Democrats want to pass this as part of their budget reconciliation bill which only needs a simple majority in the Senate, but so far not all Democrats have said they’ll support this legislation. It’s unclear if this bill will pass.