Consequences of “The Inflation Reduction Act of 2022” - Unintended???
Politically there has been a lot said about The Inflation Reduction Act of 2022. The legislation purportedly, will not increase taxes on the average everyday American like all of us. This Act is intended to close tax loopholes only on the Super Rich and finally make them pay their fair share of taxes.
These political statements are true, but the elephant in the room that no one has mentioned and quite frankly is ignoring; what else is hidden in this bill.
Hence, the unintended consequences to you and me now that it has been passed.
Let’s talk about this elephant/donkey and how it will create more harm than good to small businesses and the everyday working Americans. Let's put aside political rhetoric for a moment and look at what else this bill contains.
Here is the carrot- This bill imposes a “Corporate alternative minimum tax” on corporations of 15% and will also increase taxes imposed on certain select high-wealth earners.
Here is the stick - There is an enforcement arm within this bill that will step up IRS enforcement activities. Not Great, that’s the stick. The expanded IRS enforcement will not affect the wealthiest 1%, but it will end up hurting the middle class, that is you and me.
The bill allocates $80 billion for the IRS over the next 10 years. This is in addition to the current annual budget requirements. This increase will more than double the governments tax collectors, releasing 87,000 new IRS agents onto the streets.
So where will the IRS make up that deficit? Yes, small businesses and middle-class Americans.
So, great news, ultra-wealthy taxpayers and corporation will finally pay their fair share of taxes, but the real tax burden will be on the backs of the small business owners and individuals.
There are no new taxes on lower and middle-class taxpayers in truth, but in reality, who will really be paying for this $700 billion tax increase on the ultra-rich and corporations.
Be prepared, be smart, be informed, be protected. - Jeff