MSNBC host Andrea Mitchell knocked Republicans for signaling efforts to cut taxes should they retake control of Congress and suggested that such a move could hurt the economy.
Mitchell criticized Republican plans to recodify tax cuts signed into law under the Trump administration in 2017.
“One of the things they plan to do if they take over is to codify the massive tax cuts from Donald Trump—talk about a hole in the deficit, and what would that do to the economy at this point with inflation?” Mitchell asked Wednesday.
Harvard Kennedy School professor Jason Furman claimed that while Republicans continue to harp on the U.S. inflation rate, many of their proposed policies would actually make inflation worse, not better.
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“The idea that you’re going to put at the center of your agenda, you know a dramatic tax cut means that you’re going to wind up with more inflation, more budgetary deficits, higher interest rates, higher mortgage payments,” he said.
Furman added that is a “real disconnect” between the Republican concerns and their “lack of solutions.”
The Post report adds that former House Speaker Newt Gingrich told Republican leaders that regaining the House and the Senate could put President Biden in a “political bind” regarding taxes. Such a situation would force him to choose between vetoing tax cuts, likely hurting him politically in 2024, or allowing Republicans a significant legislative win.
According to The Washington Post, “many economists” allege that the GOP’s plans to enact tax cuts is not in alignment with their promises to fight inflation and reduce the deficit. The report stated that tax cuts boost inflation, increasing economic demand and throwing it out of equilibrium with supply.
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However, a number of tax policy groups, including The Tax Foundation, the largest in the country, disagree with the Post’s sources.
The Tax Foundation in particular wrote that it would be “extremely unwise” to raise taxes, especially taxes advocated by the Biden administration, during a period of negative growth and interest rate hikes.
Additionally, it added that most conversations about the relationship between taxes and inflation are “simplistic.” Generally, speaking inflation is due to the arbitrary increase of the supply of money, and lower or higher taxes do not necessarily mean higher or lower inflation.
Senate Republicans also introduced legislation this week that would prevent the IRS from using the $80 billion in new spending authority it received this year to audit taxpayers who earn less than $400,000 annually.
The two-page bill states simply that “none of the funds” provided to the IRS in the Inflation Reduction Act “may be used to audit taxpayers with taxable incomes below $400,000.”
