Fox News is spreading misinformation about the Inflation Reduction Act by claiming that it increases taxes on individuals. In reality, the bill sets a minimum for the corporate tax rate, closes loopholes, and provides funds for the IRS to better enforce existing tax laws.

The Inflation Reduction Act is a combination tax and climate bill that has a chance to pass in the Senate. The bill itself includes a 15% minimum tax on corporations (which effectively raises the corporate tax rate), tax credits for green energy, some fixes to capital gains tax loopholes, and a budget increase for the IRS to allow for better enforcement of existing tax codes. The proposed legislation has also been endorsed in a letter signed by 126 economists, who argue it will largely succeed at putting downward pressure on inflation. The Center for American Progress points out that much of the right-wing criticism that the bill would raise taxes stems from a faulty and incomplete analysis from the Joint Committee on Taxation, which alleges the bill would increase taxes on people making less than $400,000 a year. 

This JCT report was requested by Senate Republicans and only reviewed part of the bill. Specifically, it did not review any of the bill’s tax credits for health care, green energy, or prescription drugs. As such, it contains projections only for the impact of the loophole closures and minimum corporate tax, and those models claim that the bill could lead to lower incomes for the middle class. It should also be noted that the committee’s model for calculating the impact of corporate taxes is one of many, and how those taxes impact consumers is hotly debated among economists, according to the Tax Policy Center. Right-wing media has taken this prediction out of context and falsely characterized it as a tax increase. 

In fact, the Inflation Reduction Act would not raise taxes on individual taxpayers. Yet, that has not stopped right-wing media from spreading the lie that the bill would increase taxes on everybody. 

The Wall Street Journal editorial board added fuel to the fire with a column attacking the bill, claiming, “Roughly half of all new taxes would be paid by manufacturers, a disincentive for production. The bill would unleash an army of tax enforcers on small businesses, raising their costs and impeding their ability to respond to customers.” In reality, this is a gross exaggeration of the impacts of funding the IRS so it can enforce existing laws and of creating a minimum corporate tax rate of 15%. That minimum corporate rate is already popular globally and is entirely targeted at companies that make more than $1 billion a year. 

This misinformation is so blatant that one Fox guest actually clarified that a large amount of the supposed “tax increase” would just be people having to pay taxes they already owe but have not paid due to lax enforcement or loopholes. When the anchor Sandra Smith asked economist and former Obama administration official Austan Goolsbee if taxes would increase for Americans, he replied, “The closing of the tax gap that is making people pay taxes that they are supposed to have paid, and we are now going to have greater enforcement, that's not really a traditional definition of tax increase – making people pay the taxes that they owed, and they were cheating not to pay.”

Sen. Joe Manchin (D-WV) also appeared on Fox to promote the bill and called anchor Harris Faulkner’s misinterpretation of the JCT report that taxes would go up for people making less than $400,000 a year “a pure outright lie.”

Most other guests and hosts on Fox sought to push the false narrative that the bill would increase taxes on individual Americans. 

Fox inaccurately claims all taxes will spike if the Inflation Reduction Act passes

• Fox host Sean Hannity cited the JCT report’s claims without context on his show. According to Hannity, the committee “have even determined that the majority of the tax costs from this bill will be borne by households earning less than $400,000 a year.” He did not clarify that the report only covers part of the bill. Hannity further claimed that “small businesses” would get hit hard by taxes. He also neglected to mention that the corporate minimum only applies to companies making over $1 billion annually. [Fox News, Hannity, 8/2/22] 
• Fox host Ainsley Earhardt referenced the JCT analysis and said that the Inflation Reduction Act would actually increase taxes on everyone. Earhardt never mentioned that there aren’t actually any tax increases for individuals in the bill, and also referenced the misleading editorial in the Wall Street Journal, saying, “The Wall Street Journal did a big article on this, and they’re saying that you will be paying more.” [Fox News, Fox & Friends, 8/1/22]
• Republican National Committee chair Ronna McDaniel claimed that increasing taxes will hurt the American people without clarifying that the bill only closes loopholes for investments and sets a minimum corporate tax rate. McDaniel claimed, “Many Democrats have said in the past you don't raise taxes during a recession. We're in the definition of a recession with two quarters of negative GDP, and now they are raising taxes. It’s really a shame, and their policies are hurting the American people.” [Fox News, America’s Newsroom, 8/1/22]
• Reporter Edward Lawrence inaccurately claimed taxes would increase for all Americans on America’s Newsroom. Lawrence’s report referenced the JCT analysis and presented its claims as fact. He also said that the bill would “raise taxes on almost everyone, including corporations.” [Fox News, America’s Newsroom, 8/1/22]
• Lawrence pushed the same misinformation about individual tax rates on The Faulkner Focus. He also brought up the JCT analysis again. [Fox News, The Faulkner Focus, 8/1/22]
• Anchor John Roberts on America Reports repeated the false talking point about taxes going up on all Americans. Roberts claimed that the bill would “raise taxes on millions of Americans across every income bracket.” [Fox News, America Reports, 8/1/22]
• On The Faulkner Focus, GOPAC chair David Avella claimed this bill will actually increase Republican likelihood of taking the Senate in November. Avella claimed that voters would flock to support Republican candidates after they learned “tax increases that are in it and how the energy sources that they depend on are under attack.” [Fox News, The Faulkner Focus, 8/1/22]