Democrats Block Bills Prohibiting Tax Increases Until Unemployment Rate, Inflation Return To Pre-Pandemic Levels

Thomas Catenacci 

Democrats on the House Ways and Means Committee blocked GOP amendments Tuesday that would have prohibited further tax increases until the economy returns to its pre-pandemic condition.

Republican Reps. Kevin Hern and Lloyd Smucker introduced the bills as amendments to Democrats’ $3.5 trillion budget reconciliation package during the committee’s markup of parts of the sweeping legislation. The House Ways and Means Committee, tasked with ironing out legislative tax proposals, entered its fourth and final day of markups on Wednesday.

“It’s not hard to understand that this is the wrong time for Democrats to shove one of the largest tax increases in American history on the American people that have not regained their strength from the brutal blow of COVID-19,” Hern saidduring the hearing Tuesday. “Inflation is a tax on all Americans and it hurts working-class Americans the most.”

Hern’s amendment proposed to delay all tax increases until the annual inflation rate fell to or “below 2.5% for 12 consecutive months.” In August, consumer prices surged more than twice that rate, increasing at an annual rate of 5.3% and falling in line with a recent trend of high inflation.

“This is a particularly bad time to raise taxes by over $2 trillion when the economy has not yet fully recovered,” Smucker stated after introducing his amendment.

“This bill would simply say, ‘allow the economy to recover fully before implementing, if you must, some of these Green New Deal wishlist policy items,’” he continued.

The bill Smucker introduced would have delayed all tax hikes until the national unemployment rate fell back to pre-pandemic levels for six consecutive months. The current unemployment rate is 5.2% compared to the pre-pandemic level of 3.5%, according to government data.

While the economy has added 4.3 million jobs since January, it remains about 5.5 million below its pre-pandemic level.

The Democratic budget reconciliation package includes nearly $3 trillion in additional taxes.

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