|
|
Inflation is caused by too many dollars chasing too few products. The US economy was flooded with government stimulation thru the CARES Act, Payroll Protection Plan, etc. putting billions of dollars into the economy. We will see that again with the Hero payments of $500 million in Minnesota. All of these acts of government are the major driver causing inflation.
In regards to Inflation Reduction Act, IRA, it is interesting to note that the nonpartisan Congressional Budget Office, CBO, states that this act will have little to no impact on bringing down inflation. The unintended consequences of this bill could be significant. The ability of Medicare to negotiate drug prices includes only 10 prescription drugs, involves only Medicare and doesn’t take effect until 2026. Many economists believe drug companies will just raise prices on non-Medicare patients to make up for any loss in revenue.
When a company sees increases in supply costs or taxes, they then raise prices to consumers, otherwise they will ultimately go out of business. Yes, the 15 percent tax on businesses will get passed thru to consumers. So, I guess you could call that a tax on everyone.
The CBO also calculated that $20 billion in increased tax calculations will come from IRS audits of people making less $175.000. I guess our legislators who passed the Inflation Reduction Act believe cheating on your taxes is not exclusive to the wealthy.
Robert Stevens, Mound, Minnesota
Leave a Reply