The Inflation Reduction Act, one of the central policy achievements of President Joe Biden’s time in office, is a major climate bill with some health care and tax policies attached.
It contains $369 billion in funding for clean energy and electric vehicle tax breaks, domestic manufacturing of batteries and solar panels, and pollution reduction. If the bill’s clean energy policies work as intended, it would push American consumers and industry away from reliance on fossil fuels, penalize fossil fuel companies for excess emissions of methane, and inject needed funds into pollution cleanup.
Although it’s far smaller than the Build Back Better social spending and climate legislation Democrats once hoped to pass, the measure still includes new spending on other issues. It takes some significant steps on health care, including shoring up an expansion to the Affordable Care Act that was set to expire. The bill also enables Medicare to negotiate on prescription drugs — a major change that could lead to significant cost reductions for a small subset of drugs.
The agreement includes a 15 percent minimum tax on corporations with profits over $1 billion. There is also a 1 percent excise tax on corporations’ stock buybacks, which are currently not subject to any taxes.
The passage of this legislation is a much-needed accomplishment for Democrats and could help boost votes ahead of the midterm elections in November.
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