Manchin bill destroys 900,000 jobs

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Unleash Prosperity Hotline – Weekend Edition
Issue #591
08/05/2022, 08/06/2022, 08/07/2022
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1) Manchin Bill Destroys Almost One Million Jobs

CTUP senior fellow and University of Chicago professor Casey Mulligan has run the numbers:
Unlike many of the lowball estimates, this takes into account the combined effects of the supersized Obamacare subsidies, which like expanded unemployment insurance, reward people not to work, and the bill’s tax hikes on businesses.

Here is a brief summary of the analysis:

"By decreasing both the number of workers per capita and GDP per worker, respectively, the ACA and corporate-tax elements of the IRA reinforce to significantly reduce GDP per capita and average household incomes. Green energy provisions also reduce real wages and real GDP by shifting resources from high-productivity uses such as fossil-fuel extraction and drug development toward low-productivity green energy segments. This study estimates that, as a result of the IRA, real GDP per capita would be 1 to 2 percent less. In the long run, annual incomes would be reduced by about $1,300 per household, of which more than $1,200 would be reduced income from work."

His full analysis is available here:

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2) Just Like Manchin, Sinema Lied through Her Teeth
We now know that virtually everything that Joe Manchin and Kyrsten Sinema said about the Build Back Better bill was a misdirection play. Was it all intentional? We may never know, but in the end they both have signed off on a massive tax and spend bill that will do great damage to our economy. Our friends at Americans for Tax Reform found this video tape of Sinema voicing her concerns about the bill. In the end these weren’t concerns at all.
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Speaking to the Arizona Chamber of Commerce in April, Sen. Kyrsten Sinema outlined her opposition to tax increases.

Please see the transcript and video clip below:

“I had a couple guiding principles that still guide the work that I am doing today.

And first and foremost is that I will only support tax policies that promote growth and economic stability particularly during a time of coming through this pandemic, rising inflation, and what we think is a coming recession.

So I am unwilling to support any tax policies that would put a break on that type of economic growth, or stall business and personal growth for America’s industries.

Some people aren’t happy about it.

But that’s my position. And so if conversations do start again – which I’m not sure if they will or not – I’ll be bringing that position back into the negotiations.”

“You all know, the entire country knows that I am opposed to raising the corporate income tax. That was true yesterday and it is true today.”

It turns out what “the entire nation: knew to be true, wasn’t."
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3) Coal And Steel Get Clobbered
The Tax Foundation finds that the largest net tax hikes from the alternative minimum corporate tax on book income are coal and steel. The hit to coal is 16.8% of income – and this provision wasn't even mentioned in the scathing state coal associations letter we shared yesterday.

It remains to be seen whether the changes Sinema secured alter this analysis, but we doubt she stepped up to save coal for Joe Manchin. Don’t be surprised if next year Congress secures a bailout for the steel industry that this bill destroys.
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4) Once Again, We Have a Tale of Two Jobs Reports
Last month we reported that the two employment estimates conducted by the Department of Labor (one a survey of employers and one a survey of households) are telling different stories.

The headline number of more than 500,000 jobs is a blockbuster. But the household survey counted less than 200,000. The chart below shows a difference of almost one million jobs in the two surveys. Amazingly, the household survey finds that since March there has been no additional employment. Our view is that the jobs market is strong now, but not as strong as the headline numbers would suggest. The problem is still wages. They are up 5.2% over the last year compared to a yearly rise in prices of 9.1%.

5) Chart of the Day
We’ve tried to highlight over the last two weeks the perverted Democratic priorities in their Inflation Acceleration Act. No chart illustrates this point more dramatically than this one. The Democrats have allocated $79.6 billion more to hire some 80,000 more IRS agents. Meanwhile for a fraction of that cost, we could replenish our military forces and secure the border.
6) Biden’s New/Improved IRS

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