No, Joe Manchin, Taxes Don’t Cause Inflation: Kimberly Clausing

Senator Joe Manchin, in rejecting the package of tax increases and climate measures central to President Joe Biden’s economic agenda, has cited an issue of legitimate concern for Americans: the unacceptably high level of inflation.

Lest anyone be misled, I must set the record straight: Higher taxes do not stoke inflation. On the contrary, they can help get prices under control.

The economics profession, contentious as it is, has achieved near consensus on some core principles. For example: price ceilings generate shortages, tariffs distort trade, carbon taxes are efficient — and tax increases reduce inflation. Even economists who oppose higher taxes ...