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Elon Musk, CEO of Tesla and SpaceX, tweeted on Thursday about the IRS’s expansion under the “Inflation Reduction Act,” which is currently being negotiated in Congress and would raise the IRS budget by $80 billion, resulting in an extra 87,000 agents.
In the tweet, Musk posted an image of a laughing British red coat with the caption: “When the country that revolted over taxes hires 87,000 new IRS agents.”
Musk’s tweets come as the Biden administration is proposing the “Inflation-Reduction Act” to increase taxes on the wealthy and corporations to pay for social programs.
The act would raise the marginal tax rate on individuals making more than $400,000 a year to 39.6 percent, as well as create a new 21 percent tax on multinational corporations’ foreign earnings.
A new analysis from the University of Pennsylvania’s Wharton School of Business has suggested that the Senate-passed Inflation Reduction Act is unlikely to have a significant impact on inflation.
The act, which was passed earlier this month, is expected to reduce annual inflation by only 0.1 percentage points over the next five years. This is in contrast to the Biden administration’s original claim that the act would help reduce inflation by 2.5 percentage points.
The analysis also found that the act is unlikely to have any impact on the unemployment rate or economic growth.
This news comes as a blow to those who hoped that the Inflation Reduction Act would help alleviate some of the economic hardships that have been brought on by the pandemic. It is still unclear what, if any, other measures will be taken to reduce inflation and boost the economy.
The recently proposed Inflation Reduction Act may not be as effective as its name suggests.
According to the Joint Committee on Taxation (JCT), the bill would result in a tax increase for middle-class individuals. By 2024, Americans making less than $200,000 per year will pay more taxes by $16.7 billion. According to JCT projections, citizens earning between $200,000 and $500,000 will see their taxes rise by $14.1 billion together.
In light of this news, it seems that the Inflation Reduction Act may not do much to reduce annual inflation after all. It may only reduce inflation by 0.1 percentage point. While this may not seem like much, it could still have a significant impact on the economy.
Only time will tell if the Inflation Reduction Act will be effective in reducing inflation. However, if the JCT’s analysis is accurate, it seems that the bill may not be as successful as its name suggests.
Musk has been critical of the act, claiming that it will hurt innovation and stifle economic growth.
In another tweet, Musk said that he is audited by the IRS “every year,” and joked that they must have “nothing better to do.”
While it is not clear if Musk was serious or joking in his tweets, it is clear that he is not a fan of the Biden administration’s proposed tax hikes.
