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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.”
After months of negotiations, Sen. Joe Manchin , D-W.Va., and Senate Majority Leader Chuck Schumer, D-N.Y., introduced the Inflation Reduction Act of 2022. (Anna Moneymaker/Getty Images)
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.
Senate Majority Leader Chuck Schumer, D-N.Y., claimed the Inflation Reduction Act is “one of the defining legislative feats of the 21st century.” (AP Photo/Amanda Andrade-Rhoades)
Another aspect of the bill that has raised concern among many Americans is the Internal Revenue Service (IRS) funding, which would invest nearly $80 billion into the hiring of thousands of new employees nationwide, resulting in increased audit rates for working-class Americans and small-businesses. Democrats supporting the bill have also claimed the increase in audits under the bill is a myth.
The bill comes just weeks after inflation hit a 40-year-high and the gross domestic product (GDP) dropped for the second consecutive quarter, entering the economy into a technical recession.
The Inflation Reduction Act passed in the Senate on Sunday, with U.S. Vice President Kamala Harris casting the tie-breaking vote. (REUTERS/Hannah Beier)
The Inflation Reduction Act of 2022, a negotiated version of the Build Back Better Act, was passed in the Senate on Sunday. Democrats currently hold the majority in the House of Representatives, and expect the bill to pass during the Friday vote.
Aubrie Spady is a Freelance Production Assistant for Fox News Digital.