Looks like the IRS is going to be getting bigger. Congress has also included a corporate alternative minimum tax of 15%. Many more green energy credits that will give many tax payers motivation to purchase electric vehicles. Does it actually reduce inflation?
The IRS will be adding more employees, how many? Not nearly the amount reported on many news outlets. Instead of 78,000, more like 20,000 to 30,000. It will probably return to its size, before all the the budget cuts of the last two administrations.
The 15% corporate minimum tax only applies to very large corporation. I believe revenues of over 1 billion per year. This is probably pretty good considering many of these corporations somehow find ways of paying practically no taxes. These corporations have the resources to hire the best tax professional to focus on all the credits that reduce the corporate tax rate down to practically zero. Corporations dividends usually are usually taxed at the stockholder level on their 1040s.
The green energy credits are a good thing. They do seem to help wealthier tax prayers however. The cost of an electric vehicle is usually out of the my customers reach. I believe the credit will be as much as $7500 per vehicle. The down side is electric vehicle are currently much more than a gas powered vehicle. Most of my sole proprietor( small business owners) will not benefit from this yet.
Will the inflation reduction act cut inflation? In the short term probably not much. In the long run, maybe. I mean taxing more and not printing money( as we did in Covid) will probably not increase inflation. But decrease inflation? That one I am a little confused about.
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