Inflation Reduction Act (IRA) Taxes
Update by TRI Lobbyist, Craig S. Brightup
In addition to giving the IRS $80 billion to hire 87,000 new auditors, Inflation Reduction Act revenue raisers include a 15% minimum tax on companies making $1 billion annually; a stock buyback tax; and targeted taxes like the “oil superfund tax” that could raise gas prices. Pass-through business loss limitations opposed by two coalition letters that TRIA signed were extended, and another letter successfully precluded applying the ACA’s 3.8% investment tax to all business income above $400,000 for sole proprietors, partnerships and S corporations.
Federal Spending and Inflation
CBO’s ten-year budget estimates for the IRA have revenue at $739 billion, spending at $433 billion and deficit reduction at $306 billion, but the spending is frontloaded. Thus, the IRA’s $433 billion will be added to July’s $280 billion for the CHIPS & Science Act for more inflationary spending. In turn, this spending will be compounded by President Biden’s student loan forgiveness announced 8/24 that has a cost of at least $500 billion over a decade and will boost inflation by 15 to 27 basis points over the next year (per the Committee for a Responsible Federal Budget).
On August 24, the Dept. of Homeland Security announced its DACA final rule as posted by the agency and published in the Federal Register. Per DHS, the final rule codifies existing policies with limited amendments and goes into effect on Oct. 31. The DHS News Release explains that pursuant to a July 16, 2021 federal district court injunction, DHS can grant renewal requests but is prohibited from granting status to initial applicants.