As Inflation Shrinks Americans’ Paychecks, Democrats’ New Plan Is To Raise Their Taxes

Democrats Have Gone From Denying Inflation Was A Problem, To Insisting That Even More Spending Was The Inflation Solution, To Now Saying That ‘The Only Way To’ ‘Get Rid Of Inflation’ Is To Raise Taxes On Americans!

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “Runaway inflation is crushing working American families on Democrats’ watch. The share of Americans who say the economy is our most important problem hasn’t been this high since the last time Democrats controlled the White House…. We haven’t seen inflation this bad in more than 40 years. Month after month of skyrocketing prices. It’s exactly what everyone knew would happen if Democrats dumped $2 trillion in printed money on an economy that was all ready for a comeback. But Democrats rammed through the far left spending. So working Americans are paying dearly. This week, the same Washington Democrats who drove this inflation have finally figured out their response: They want to raise taxes on the American people…. The answer for Democrats hurting families once is for Democrats to hurt families twice. This is literally Democrats’ economic agenda for your family: High prices and less money. Republicans’ 2017 tax cuts just about doubled the standard deduction for households. We created a brand-new zero percent tax bracket for the first $24,000 that a married couple brings in. Repealing that law would cut that in half and raise your taxes. That’s what repealing the 2017 tax bill means. Republican tax cuts also doubled the Child Tax Credit from $1,000 to $2,000. A tremendous help to working families. Repealing the 2017 tax law would slash those credits in half. But that’s what Democrats say they want to do — because of the inflation they created. This is Senate Democrats’ position: Because their bad decisions have hurt Americans once, the solution is to hurt Americans twice. First they hurt you with inflation, and now they want to hurt you with tax hikes.” (Sen. McConnell, Remarks, 4/28/2022)


A Recent Gallup Poll Shows More Americans Citing Economic Concerns As The Most Important U.S. Problem Than At Any Other Time In The Last Six Years

“Americans’ confidence in the economy remains very low, and mentions of economic issues as the most important problem in the U.S. are at their highest point since 2016. Inflation, which registered as the top economic problem last month and continues to be, was previously at this level in 1984.” (“Inflation Concerns Fueling Low Economic Confidence In U.S.,” Gallup, 4/27/2022)

Americans Pointed To Inflation And The High Cost Of Living As The Top Economic Issues

In the most recent Gallup poll, among Americans naming an economic issue as the most important problem facing the country, or the high cost of living is the top concern. (“Inflation Concerns Fueling Low Economic Confidence In U.S.,” Gallup, 4/27/2022)

  • “Roughly four in 10 Americans name economic issues as the most important problem facing the U.S. This figure includes 17% who mention inflation or the high cost of living, 12% who name the economy in general and 6% who say fuel prices. … The percentage of U.S. adults who cite any economic concern as the country’s most important problem has edged up four percentage points this month to 39%, the highest level in six years.” (“Inflation Concerns Fueling Low Economic Confidence In U.S.,” Gallup, 4/27/2022)


According To One Estimate, Inflation Will Cost The Average American Household An Extra $5,200 This Year

“Inflation will mean the average U.S. household has to spend an extra $5,200 [in 2022] ($433 per month) compared to last year for the same consumption basket, according estimates by Bloomberg Economics.” (“U.S. Households Face $5,200 Inflation Tax This Year,” Bloomberg, 3/29/2022)

Struggling To Respond To The Inflation Their Spending Fueled, Democrats’ ‘Only’ Plan Is To Raise Americans’ Taxes

SENATE MAJORITY LEADER CHUCK SCHUMER (D-NY): “If you want to get rid of inflation, the only way to do it is to undo a lot of the Trump tax cuts and raise rates. No Republican is ever going to do that. So, the only way to get rid of inflation is through reconciliation.” (Sen. Schumer, Press Conference, 4/26/2022)

The Same Democrats Who Want To Raise Taxes To Fight Inflation Dismissed Economists’ Warnings That Their Reckless Spending Would ‘Set Off Inflationary Pressures Of A Kind We Have Not Seen In A Generation’

THE WALL STREET JOURNAL EDITORIAL BOARD: “The same policy wizards who brought you soaring inflation are now offering what they claim is a solution to inflation: Raise taxes. Our advice is to consider the source and the economic record their previous advice produced.” (Editorial, “Tax Increases Won’t Cure Inflation,” The Wall Street Journal, 4/27/2022)

FLASHBACK: Schumer Last Year: ‘I Do Not Think The Dangers Of Inflation, At Least In The Near-Term, Are Very Real’

SCHUMER: “I do not think the dangers of inflation, at least in the near-term, are very real.” (MSNBC, 3/12/2021)

LARRY SUMMERS: “[T]here is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability…. [G]iven the commitments the Fed has made, administration officials’ dismissal of even the possibility of inflation, and the difficulties in mobilizing congressional support for tax increases or spending cuts, there is the risk of inflation expectations rising sharply. Stimulus measures of the magnitude contemplated are steps into the unknown.” (Larry Summers, Op-Ed, “The Biden Stimulus Is Admirably Ambitious. But It Brings Some Big Risks, Too.,” The Washington Post, 2/04/2021)

The Federal Reserve Bank Of San Francisco’s Research Attributes The Federal Government’s Stimulus To Half Of America’s 2021 Inflation Increase

“The comparatively large jump in prices in America is owed at least partly to the nation’s ambitious spending. Research from the Federal Reserve Bank of San Francisco attributed about half the nation’s 2021 annual price increase to the government’s spending response.” (“Rapid Inflation, Lower Employment: How the U.S. Pandemic Response Measures Up,” The New York Times, 4/25/2022)

Economists Are Continuing To Criticize The Sheer Size Of Democrats’ Recent Stimulus Spending As The U.S. Has Suffered Higher Inflation And A Slower Employment Recovery Than Other Developed Countries

“The United States spent more aggressively to protect its economy from the pandemic than many global peers, a strategy that has helped to foment more rapid inflation — but also a faster economic rebound and brisk job gains. Now, though, America is grappling with what many economists see as an unsustainable worker shortage that threatens to keep inflation high and may necessitate a firm response by the Federal Reserve. Yet U.S. employment has not recovered as fully as in Europe and some other advanced economies. That reality is prodding some economists to ask: Was America’s spending spree worth it?” (“Rapid Inflation, Lower Employment: How the U.S. Pandemic Response Measures Up,” The New York Times, 4/25/2022)

“Inflation has picked up around the world, but price increases have been quicker in America than in many other wealthy nations. Consumer prices were up 9.8 percent in March from a year earlier, according to a measure of inflation that strips out owner-occupied housing to make it comparable across countries. That was faster than in Germany, where prices rose 7.6 percent in the same period; Britain, where they rose 7 percent; and other European countries. Other measures similarly show U.S. inflation outpacing that of its global peers.” (“Rapid Inflation, Lower Employment: How the U.S. Pandemic Response Measures Up,” The New York Times, 4/25/2022)

JASON FURMAN, an economist at Harvard University and a former economic official in the Obama administration: “I’m worried that we traded a temporary growth gain for permanently higher inflation.” (“Rapid Inflation, Lower Employment: How the U.S. Pandemic Response Measures Up,” The New York Times, 4/25/2022)

Employment Recovery In The United States Has Been Slower Than Many Other Developed Countries

“But increasingly, at least when it comes to the job market, America’s achievement looks less unique. Unemployment in the United States jumped much higher at the outset of the pandemic in part because America’s policies did less to discourage layoffs than those in Europe. While many European governments paid companies to keep workers on their payrolls, the U.S. focused more on providing money directly to those who lost their jobs. Joblessness fell fast in the United States, too, but that was also true elsewhere. Many European countries, Canada and Australia are now back to or below their prepandemic unemployment rates, data reported by the Organization for Economic Cooperation and Development showed.” (“Rapid Inflation, Lower Employment: How the U.S. Pandemic Response Measures Up,” The New York Times, 4/25/2022)

“And when it comes to the share of people who are actually working, the United States is lagging some of its global peers. The nation’s employment rate is hovering around 71.4 percent, still down slightly from nearly 71.8 percent before the pandemic. By comparison, the eurozone countries, Canada and Australia have higher employment rates than before the pandemic, and Japan’s employment rate has fully recovered.” (“Rapid Inflation, Lower Employment: How the U.S. Pandemic Response Measures Up,” The New York Times, 4/25/2022)

“But the red-hot labor market carries its own risks. For one thing, wage growth is not keeping up with rapid inflation for many people, leaving some households behind even as their paychecks get bigger. And the ratcheting up in wages could prompt companies to try to cover their costs by raising prices even more. … But if the Fed has to raise rates to high levels to restore economic calm, it could touch off a recession that pushes the unemployment rate higher. … [I]f central bankers decide they need to take more drastic steps, resulting in a recession, it could reverse some of the recent progress — and the consequences are likely to be worse for low-wage workers who have experienced the strongest job and wage gains” (“Rapid Inflation, Lower Employment: How the U.S. Pandemic Response Measures Up,” The New York Times, 4/25/2022)



Related Issues: Inflation, Taxes, Senate Democrats