The Penn Wharton University of Pennsylvania Budget Model released an analysis today showing average U.S. households will spend $3,500 more in 2021 just to keep up with inflation, with lower-income households particularly feeling inflation’s sting. U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) says that if the Democrats’ reckless tax-and-spend bill is passed, American households can expect this stealth tax to be even higher.
From the analysis: “We estimate that inflation in 2021 will require the average U.S. household to spend around $3,500 more in 2021 to achieve the same level of consumption of goods and services as in recent previous years (2019 or 2020). Moreover, we estimate that lower-income households spend more of their budget on goods and services that have been more impacted by inflation. Lower income households will have to spend about 7 percent more while higher income households will have to spend about 6 percent more.”
“Americans have been extremely clear that inflation and rising costs are their top concerns right now,” said Crapo. “Inflation is now at 6.8 percent, reaching a near 40-year high. The producer price index is up 9.6 percent, the fastest pace on record. This analysis is telling us that even without the Democrats’ reckless tax-and-spend legislation, lower-income households will experience a $3,500 stealth tax. If Democrats push forward with their bill, which is front-loaded with inflationary spending and full of job-killing tax hikes, Americans can expect to pay even more to keep up with rising costs without getting ahead.”