Analysis suggests Inflation Reduction Act will reduce annual inflation by only 0.1 percentage points

The Senate-passed Inflation Reduction Act is expected to have almost zero impact on inflation, according to a new analysis.

A University of Pennsylvania Penn Wharton analysis released Friday revealed the Inflation Reduction Act of 2022 would do little to reduce the annual rate of inflation in the midst of the economic recession. The bill would only reduce annual inflation by 0.1 percentage point over the next five years.

The study estimated that the small inflation reduction would begin only “once major deficit-reducing provisions of the legislation are fully implemented, but the Act would have no measurable impact on inflation after 2028. All these point estimates are not statistically different from zero, indicating a low level of confidence that the legislation would have a measurable impact on inflation.”

The Joint Committee on Taxation (JCT) recently reported that middle-class earners would see an increase in their taxes as a result of the bill. Reporting from the committee revealed that Americans making less than $200,000 per year would have their taxes increased cumulatively by $16.7 billion. For taxpayers earning between $200,000 and $500,000, the bill would increase taxes by $14.1 billion.

Democratic representatives have claimed that the tax hike is misinformation and the bill will not increase taxes on individuals making under $400,000 per year.- READ MORE