Image Credit: Senator Rand Paul / Facebook
The Center Square [By Casey Harper] –
Sen. Rand Paul, R-KY., released a new report Tuesday detailing the effects inflation has had on families and businesses around the country and calling it a “hidden tax” on Americans.
In the report, Paul blames the federal COVID-19 stimulus spending for record high inflation.
“$4.9 trillion in COVID-19 stimulus spending has led to one of the highest and most sustained levels of inflation in U.S. history,” Paul said. “While government stimulus spending was intended as a form of relief, and low and middle-income families as well as small business owners were promised that their taxes would not increase, Americans everywhere are now paying a hidden tax called inflation.”
In particular, lower-income families and small businesses have been the hardest hit, according to the report.
“This report concludes that, though no formal tax has been levied to pay for the government’s recent spending trends, a hidden, regressive tax has been levied on the American public, charging more from low and middle-income families and small businesses and less from wealthy families and big businesses,” the report said.
The report comes after record increases in prices in recent months. The Department of Labor’s Bureau of Labor Statistics released new inflation figures for December showing the price of goods and services have risen at the fastest rate since 1982.
“The all items index rose 7.0 percent for the 12 months ending December, the largest 12-month increase since the period ending June 1982,” BLS said. “The all items less food and energy index rose 5.5 percent, the largest 12-month change since the period ending February 1991. The energy index rose 29.3 percent over the last year, and the food index increased 6.3 percent.”
Meanwhile, the consumer price index data released this month showed the fastest rise in decades.
“This was the sixth time in the last 9 months it has increased at least 0.5 percent,” BLS said. “Along with the indexes for shelter and for used cars and trucks, the indexes for household furnishings and operations, apparel, new vehicles, and medical care all increased in December. As in November, the indexes for motor vehicle insurance and recreation were among the few to decline over the month.”
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Small businesses have been hit hard by rising prices. The National Federation of Independent Businesses released a report last week showing that the recent spike in inflation is among small businesses’ top concerns.
The NFIB report found that 22% of small business owners point to inflation as the biggest problem for operating their business, a 20% increase from the year prior.
Paul’s report says that “82 percent of small businesses reported raising prices in the last several months, 42 percent reported raising prices by 20 percent or more” while “45 percent of small businesses reported taking out a loan to cope with the pressures of inflation in this last year.”
“Large corporations have reported consistent profit margins,” the report adds.
Paul’s report also highlights how higher prices on things like gasoline and food disproportionately affect poorer families.
“Low and middle-income families spend a larger portion of their income on high-inflation items, such as gasoline, used cars, and food,” the report said. “Families in the lowest income quartile spend nearly 40% of their annual income on these three categories. As a means of comparison, families in the top quartile spend only 10% of their annual income on these categories.”
Paul said the prices will likely only increase.
“In recent months, prices on nearly everything from gas, food, and clothes to electricity, car prices, and rent, have all increased, and unfortunately it’s only going to get worse,” Paul said. “Congress needs to realize that further spending at this time of rapidly rising prices is only going to continue the trend of rising prices on this nation’s already vulnerable businesses and families.”
About the Author: Casey Harper, The Center Square D.C. Bureau Reporter – charper@centersquare.com ~ Harper is a Senior Reporter for the Washington, D.C. Bureau. He previously worked for The Daily Caller, The Hill, and Sinclair Broadcast Group. A graduate of Hillsdale College, Casey’s work has also appeared in Fox News, Fox Business, and USA Today.
