Can Biden actually reduce Inflation? | Inflation Reduction Act, President Joe Biden, Kyle Kulinski

With a harrowing inflation rate of 6% over the last 12 months in America, calls have been made to deal with the problem of rising prices. One such solution that you may have heard of is the subtlety titled Inflation Reduction Act, which has been proposed and passed by President Joe Biden. The Act itself is a successor to Biden’s previous proposal called Build Back Better which failed to be enacted. And the main aim of the Inflation Reduction Act is to – surprise surprise, reduce inflation. But does it actually achieve this aim? And with the scale of such a policy, it of course has other concerns such as reducing the deficit. In fact, deficit reduction is needed to deal with inflation and is one of the main aims of this bill, this video will focus a lot on measures cutting the deficit and whether they are effective. And even focus on other economic indicators like GDP growth and employment projections.
The Act proposes tax rebates and credits for a variety of green measures, a 15% minimum corporate tax for companies above $1 billion in income, a 1% tax on stock buybacks, raising the supertax on crude oil and imported petroleum to 16.4%, extending deduction limits on pass-through tax losses, allows Medicare to negotiate drug prices, limits the increase in prices of some Medicare-covered drugs, raising the research and development tax credit to $250000 for small businesses, provides $80 million to the IRS for hiring and improving their services and extending the temporary expansion of affordable care act subsidies through 2025 to households 400% above the poverty line. BTW, these temporary expansions don’t seem to be so temporary. But let’s see if Biden’s bill can reduce the deficit.
CBO/PBM: According to the Penn Wharton Budget model, the spending and revenue provisions would reduce deficits by a cumulative $248 billion from 2022 to 2031 while the Congressional Budget Office estimated that the deficit would be reduced by $305 billion. Of course the projected net benefits may take time to occur, with the CBO estimating an initial $20 billion in deficit reduction but no significant reductions til 2026, while Penn Wharton even projects deficit increases until 2026. While the difference in deficits between the 2 estimates is $57 billion over a decade, it represents less than 0.1% of projected revenues so the Pen Wharton and CBO estimates are very close. But the disparity in their estimates mainly arises from the CBO assuming that the minimum corporate tax raises $53 billion more over 10 years.

Sources:
Tax Foundation Analysis:
https://taxfoundation.org/inflation-reduction-act/
CBO Penn Wharton Estimates:
https://budgetmodel.wharton.upenn.edu/issues/2022/8/5/inflation-reduction-act-comparing-cbo-and-pwbm-estimates
Penn Wharton Further Analysis:
https://budgetmodel.wharton.upenn.edu/issues/2022/8/12/senate-passed-inflation-reduction-act
Committee for Fiscal Responsibility Analysis 1:
https://www.crfb.org/blogs/whats-inflation-reduction-act
Committee for Fiscal Responsibility Analysis 2:
https://www.crfb.org/blogs/ira-will-help-fed-fight-inflation
Committee for Fiscal Responsibility Analysis 3:
https://www.crfb.org/blogs/ira-saves-almost-2-trillion-over-two-decades
Yahoo Article:
https://news.yahoo.com/climate-change-bill-would-cut-us-air-pollution-deaths-by-up-to-3900-per-year-study-finds-191755579.html
Kyle Kulinski Video:
https://www.youtube.com/watch?v=RnmWujQo4wY&t=992s

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