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The Penn Wharton Budget Model (PWBM) released updated estimates of the budgetary and macroeconomic effects of Democrats’ reckless tax-and-spend spree earlier today.

No Impact on Inflation

The model, an initiative of the University of Pennsylvania, found that Democrats’ misnamed “Inflation Reduction Act” would have “no meaningful effect on inflation in the near term.”

Here it is straight from the report:

“The Act would have no meaningful effect on inflation in the near term but would reduce inflation by around 0.1 percentage points by the middle of the first decade. These point estimates, however, are not statistically different from zero, indicating a low level of confidence that the legislation would have any measurable impact on inflation.”

Tax Hikes Hit Households and Shareholder Returns, Lower Wages

“Though not responsible for remitting taxes assessed on business activity, households bear some of the economic burden of such taxes. Shareholders receive lower after-tax returns, and workers earn lower wages with fewer productivity-enhancing investments.”

Manchin’s most-trusted economic model

Politico reported last November that UPenn Wharton’s analysis is Sen. Joe Manchin’s (D-W.Wa.) prefered budgetary model:

“PWBM has proven influential with one particularly important audience: Sen. JOE MANCHIN (D-W.Va.), who takes its findings seriously, according to people familiar with the matter.”

Workers and Retirees are Harmed by Democrats’ Bill

PWMB found that workers and retirees are worse off under Democrats’ proposal compared to current law:

“Current workers and retirees prefer current law over the provisions in the Inflation Reduction Act. People alive today bear the burden of business tax increases in the form of lower investment returns and lower wages in the near term.”

Reduces Economic Growth

“The provisions which increase taxes on business activity lower the after-tax return to investment, which offsets the positive effects on investment from lower government debt. Net of these two effects, private productive capital declines by 0.2 percent in 2031, is unchanged in 2040 and increases by 0.3 percent in 2050. The drop in productive capital in 2031 leads to a 0.1 percent decline in GDP.”