Riley Shelton
Signed into law on August 16, 2022 by President Joe Biden, the Inflation Reduction Act is meant to lower prescription drug costs, curb inflation, lower healthcare insurance, and incentivize clean energy. Pouring $370 billion (Penn Today, 2022) into legislation addressing climate change, this bill is extremely progressive in terms of environmental legislation.
This bill was initially proposed by Biden as the “Build Back Better Act.” It was meant to make the largest public investments into social, infrastructural, and environmental programs since the New Deal during the Great Depression. Passage of the Build Back Better Act was halted when West Virginia Senator Joe Manchin (Democrat) pulled his support due to his opinion that the bill consisted of overly aggressive climate policies. After renegotiations, the legislation was approved and passed by Congress and signed into law on August 16, 2022, as the Inflation Reduction Act.
A strong emphasis was placed on clean energy in the Inflation Reduction Act, which includes incentives for property owners that choose to invest in green or renewable energy solutions. For example, homeowners that have 1) invested in green energy solutions, and 2) meet the predetermined standards set by the federal government, will receive a 10% increase to their clean energy tax credit. The incentives included in this bill are positive for civil society as well as on a larger/corporate scale, with a 15% corporate minimum tax and a 1% fee on stock buybacks (CPA Journal, 2022)
The approval of the Inflation Reduction Act is a step forward for middle-class Americans in the shift toward a renewable grid. It provides more opportunities for households to lower their net costs. Incentivizing the purchase of electric vehicles through tax breaks and discounts when purchasing, will not only save people money but also reduce individual carbon footprints. Many lower-income people (especially people of color) suffer from major health issues due to exposure to pollutants and lack of healthcare. By investing $60 billion into environmental justice programs and disadvantaged neighborhood litter reduction initiatives, the Inflation Reduction Act hopes to attack environmental healthcare disparities from a preventative angle.
The Inflation Reduction Act is certainly a step forward in terms of social restructuring and the development and implementation of climate-related mitigation methodologies; however, the act isn’t the universal cure to our plethora of problems. The push for electric vehicles is great, but many people are unable to afford a regular car let alone an electric one, as well as the many issues (ethical and environmental) involved in mining for the rare metals used in electric car batteries. However, with its aim to protect small businesses and families making under $400,000 dollars a year, hopefully, the act will facilitate changes with respect to the affordability issue. In comparison to some legislation passed in recent years (e.g., repealing of the Clean Water Act and negative restructuring of EPA guidelines), this bill is a great step forward in terms of climate and healthcare. By focusing on America’s middle class, this act helps build a stronger, more efficient, and resilient social system. It’s imperative that the people who can utilize these new tax breaks learn how to do so. Many Americans are unfamiliar with the details of this bill, let alone how they can tap into some of its new benefits. Effectively distributing targeted outreach material (ie., guidance documents, effective messaging, etc.), especially in disadvantaged neighborhoods, will help make this bill as effective as possible.
Citations
THE WHITE HOUSE. (2022, August 19). FACT SHEET: The Inflation Reduction Act Supports Workers and Families. statements and releases. Retrieved from https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/19/fact-sheet-the-inflation-reduction-act-supports-workers-and-families/#:~:text=The%20Inflation%20Reduction%20Act%20lowers,union%20jobs%20across%20the%20country
Bailllie, K. U. (2022, August 17). Understanding the Inflation Reduction Act. Penn Today. Retrieved from https://penntoday.upenn.edu/news/Penn-experts-explain-Inflation-Reduction-Act
Levin, M. H. (2022, August). The Inflation Reduction Act of 2022: A First Look at New Tax Provisions. The CPA Journal. Retrieved from https://www.cpajournal.com/2022/08/29/the-inflation-reduction-act-of-2022/
Text – H.R.5376 – 117th Congress (2021-2022): Inflation Reduction Act of 2022. (2022, August 16). http://www.congress.gov/
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