In an urgent letter to members of the Senate last week, WR and other associations joined the U.S. Chamber of Commerce in making it known we do not support the Inflation Reduction Act. The bill passed the Senate on Sunday with 50 votes along party lines, with Vice President Harris casting the tie-breaking vote. The bill will be considered by the House tomorrow, August 12.
Although the bill is called the Inflation Reduction Act, the sweeping bill would effectuate the most significant climate investment in our country’s history, make major changes to health policy by giving Medicare the power to negotiate the prices of certain prescription drugs and extend expiring health care subsidies for three years. The legislation includes a 15% minimum tax on large corporations, a 1% tax on stock buybacks, and would boost the Internal Revenue Service’s ability to collect. The additional taxes are purposed to help pay down the nation’s debt.
The letter details the coalition’s concerns about the bill, including:
- The legislation would impose significant new tax increases and unprecedented government price controls that would deter investment, inhibit innovation, and undermine economic growth.
- Despite rebranding the legislation as the “Inflation Reduction Act,” the bill could increase inflation in the short term and would not reduce inflation over the long term, according to multiple analyses.
- The net effect of the Book Minimum Tax would be less capital investment, making America poorer and reducing future economic growth.
- The excise tax on stock buybacks would only distort the efficient movement of capital to where it can be put to best use and diminish the value of Americans’ retirement savings.
- Price controls on pharmaceuticals would significantly reduce private sector investment in new research and drug development. Analysis indicates that this could result in a loss of nearly 600,000 jobs. The Congressional Budget Office predicts that such controls would lead to 15 fewer new drugs over the next 30 years. These changes would significantly harm patients and our health care system.