The Arizona Chamber of Commerce & Industry and the Arizona Manufacturers Council are raising concerns that the newly proposed Inflation Reduction Act (IRA) could raise taxes on Americans and discourage business investment.
The Chamber just partnered with the National Association of Manufacturers (NAM) to produce a TV ad encouraging Arizona’s congressional delegation to oppose the bill in its current form.
President Biden’s economic and climate agenda was revived last week after Sen. Joe Manchin, D-W.V., signed onto legislation whose provisions were previously part of the failed Build Back Better (BBB) bill. Now renamed the IRA, the bill would:
- Establish a 15% corporate minimum tax
- Enforce certain price controls on prescription medication
- Allow Medicare to negotiate drug prices
- Expand the Internal Revenue Service (IRS) budget by $124 billion
- Fill what Democrats are characterizing as the “carried interest loophole”
- Invest $369 billion in renewables and climate programs
- Extend the Affordable Care Act
The IRA’s total price tag is just shy of $500 billion.
The Chamber and AMC are concerned that the bill’s provisions would harm American innovation and raise taxes on job creators. These policies are neither bipartisan nor beneficial for everyday Americans, the business groups assert.
“The negative implications of the tax and drug pricing provisions of the bill are too damaging to pass it in its present form,” said Danny Seiden, president and CEO of the Arizona Chamber.
Seiden said the bill’s establishment of new tax credits for “emerging energy technology”, which are meant to spur investment in renewables and environmentally-friendly tech, should be separated from the IRA.
The bill also worries manufacturers, who fear the bill will raise taxes on their firms.
“Arizona manufacturers are already struggling under record-high inflation, supply chain backlogs, and a major labor crunch,” Arizona Manufacturers Council Executive Director Grace Appelbe said. “Now is not the time to hammer manufacturers with new taxes.”
So, what is to be done about rising inflation and a looming recession, then?
Neil Bradley, the chief policy officer at the U.S. Chamber of Commerce, says that “Congress and the Administration should reject these policies and focus on unleashing American made energy.”
The Arizona business community believes that past bipartisan legislation can show the way.
“Last year’s infrastructure bill and this year’s semiconductor bill showed that the U.S. Senate can still accomplish big things on a bipartisan basis,” Seiden said. “Sen. Sinema and Sen. Kelly should reject this bill and bring their colleagues back to the drawing board.”
Senators Kyrsten Sinema and Mark Kelly have yet to comment on how they will vote on the IRA.