Two weeks ago, the “Inflation Reduction Act” <fraudulent labeling alert> not only didn’t exist but wasn’t expected ever to come into being. Then Joe Manchin decided that he was tired of being elected to office in West Virginia and signed onto a deal with Chuck Schumer. Last Thursday, the deal was revamped to furnish 30 pieces of metaphorical silver to Kyrsten Sinema’s private equity funders. Today, the Senate passed the sausage on to the House after spending all night voting.
Like everyone else, except perhaps the overworked Senate parliamentarian, I haven’t read the resulting bill. But I don’t need to. The way in which it is racing through Congress is as sure a proof of rottenness as the odor emitted by a week-old mackerel lying in the Sun.
There are emergencies in which legislatures must act quickly if they are to act at all. Here there is an “emergency” in a different sense. Congress must pass INFRACT right away, lest people have time to think about its provisions. Whether the ideas underlying it are sound or spurious, they do not respond to an urgent need. Enacting them can wait, if the objective is to fashion laws that will actually accomplish their ostensible objectives.
Let’s leave to one side the question of whether the ideas embodied in the bill are good. Whatever their merits, their implementation will be complicated. Unintended consequences aren’t just a possibility; they’re certain.
To take just one example, the bill includes a 15 percent “minimum tax” on the income of large corporations as reported on their financial statements. Financial statements are prepared in accordance with Generally Accepted Accounting Principles, which vary widely from those used by the Internal Revenue Code. As the Tax Foundation has pointed out, the minimum tax “will have disproportionate effects on specific industries, and apparently unintended penalties for various company- and industry-specific expenses”. In many cases, those effects may undercut INFRACT’s goals. The only way to minimize undesired effects is through a careful analysis, for which no time has been allotted.
Other parts of the bill – drug price controls, expansions of Obamacare, tax credits and subsidies for wind and solar power, a massive increase in IRS oversight into citizens’ lives – are equally in need of careful vetting.
The law that has been the foundation of my professional career, the Employee Retirement Income Security Act of 1974, was the product of a legislative process that lasted six years, and even then not all of the bugs were plucked out. INFRACT hasn’t spent a lot longer than six days in the legislative pot, but the country will be consuming it for years. Would it be too much to ask for a thorough nutritional review?
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