Illinois Republicans warn of negative effects of climate legislation in Inflation Reduction Act

[August 16, 2022]  By Greg Bishop | The Center Square

(The Center Square) – President Joe Biden is expected to sign the Inflation Reduction Act passed by the U.S. Congress last week. The impact on Illinois taxpayers depends on who you ask.

The measure increases taxes on people and businesses making $400,000 or more per year as part of spending more than $730 billion on various programs, including so-called renewable energy programs.

Monday, Illinois Gov. J.B. Pritzker said the tax increases won’t impact “the middle class.”

“And it’s asking the wealthiest people, frankly people who make a lot of money, people like me, to pay more and I think that’s a pretty decent idea,” Pritzker said at an unrelated news conference. “If you want to bring down the deficit and pay for the programs we need in the country.”

U.S. Rep. Darin LaHood, R-Peoria, said in a statement quote “the so-called ‘Inflation Reduction Act’ is filled with tax hikes that will harm working families, manufacturers, and Main Street businesses. On Twitter, LaHood said: “Raising taxes in the middle of a recession and an inflation crisis is the last thing families need.”

In a response to questions from U.S. Sen. Lindsey Graham, R-North Carolina, the Congressional Budget Office said that enacting the legislation would “reduce some businesses’ incentives to invest through changes in the after-tax return on private investment, pushing down output and inflation.”

“In addition, enacting the bill would reduce the incentives of some people to work, mainly because of the enhanced health insurance subsidies, pushing down output and pushing up inflation,” the CBO said. “Enacting the bill would affect economic activity and inflation beyond 2023. CBO has not evaluated those effects.”

Part of the more than $730 billion in spending from increased taxes includes increased subsidies for renewable energy to the tune of nearly $370 billion. Pritzker said the federal program will add to the state’s renewable energy initiatives.

“It certainly provides us an ability to do more overtime,” Pritzker said. “I wouldn't say it necessarily speeds things up, but it allows us to expand what we’re doing.”

U.S. Rep. Mary Miller, R-Oakland, said the measure should be called the “Increase Inflation Act.” In a statement opposing the measure, Miller said the bill will “benefit the Chinese Communist Party because China mines the minerals and manufactures the solar panels and windmills that House Democrats want to subsidize.”

The measure also increased funding for 87,000 Internal Revenue Service employees, a move opponents said will increase audits on all income levels.

“This bill targets low and middle-income families by creating a supercharged IRS with unprecedented new audit and enforcement authorities,” LaHood said.

Greg Bishop reports on Illinois government and other issues for The Center Square. Bishop has years of award-winning broadcast experience and hosts the WMAY Morning Newsfeed out of Springfield.