The Inflation Reduction Act turns one year old
From the White House to the West Coast, advocates on Wednesday celebrated the one-year anniversary of passage of the Inflation Reduction Act (IRA). The (literally) groundbreaking legislation made historic investments in clean energy, lowered health care costs for millions of Americans, and advanced tax fairness by raising taxes on wealthy corporations while giving the IRS the resources it needs to pursue tax cheats.
“One year ago today, President Joe Biden signed into law the Inflation Reduction Act. The landmark legislation is already having a huge impact by creating thousands of jobs, cutting costs for prescription drugs, and acting on clean energy and climate change,” said Cherie Collins Sims, Interim President and CEO of Prosperity Now. “But, while the Inflation Reduction Act has accomplished much good, we need to recognize that there was and is more work that needs to be done to create a more equitable tax system for our nation’s families.”
Protect Our Care’s Care Force One marked the anniversary by continuing its nationwide bus tour with stops in Orange County, California, and Palm Springs. The bus tour will stop at more than 30 events in 16 states.
“Last year, the lives of millions of seniors and families changed forever when President Biden signed the Inflation Reduction Act into law,” the group said in a statement. “The Inflation Reduction Act is already allowing families to sleep easier at night knowing they can go to the doctor without worrying about how they’re going to put food on the table or pay rent. Seniors can get necessary vaccines for free and insulin at a reasonable cost. Critically, Medicare will soon be able to negotiate for lower drug prices — a long-fought battle to help seniors and taxpayers alike.”
Specifically, Protect Our Care credited the IRA with helping 1.5 million Americans who use insulin by capping their monthly payments for the drug at $35. And it said another 12.5 million Americans are saving an average of $508 on monthly health insurance premiums, while 50.5 million seniors are able to receive the shingles vaccination and other recommended vaccinations free of charge. Finally, in years to come, seniors on Medicare will be protected from drug company price hikes thanks to increased inflation rebates and lower drug costs.
Climate Power, a coalition of progressive and climate change groups, called the legislation “one of the most successful pieces of legislation in history.”
The group said construction spending for manufacturing in the U.S. has reached its highest level in 60 years, and businesses have announced 270 new clean energy projects, creating 170,600 new jobs in 44 states and totaling $278 billion in new investments for local economies. What’s more, the cost of wind and solar energy has declined 54 percent and 37 percent respectively, and is now lower than coal, oil, and methane gas.
The Natural Resources Defense Council (NRDC) says the IRA invests $369 billion in fighting climate change. Much of this money is in the form of tax credits and rebates for purchasing things like electric vehicles, solar panels, heat pumps, and more. NRDC has put together a helpful consumer guide that informs would-be purchasers how they can take advantage of these tax credits and rebates and save money.
As a result of the IRA, NRDC says, “We’ll all see innumerable long-term benefits, like reduced energy bills and health-care costs. But the most direct and immediate consumer-focused advantages come in the form of tax credits and rebates for buying emissions-reducing goods and services.”
Americans for Tax Fairness notes that “The Inflation Reduction Act is a perfect case study for what we can do when we tax the rich and corporations to invest in programs for working people”, and the IRA reversed 40 years of Reagan-era economics that favored tax breaks for the very rich at the expense of the rest of us.
“For the last forty years, our economy has struggled under the weight of trickle-down economics,” the group said. “Decades of tax cuts for the wealthy and corporations have failed to trickle down to working people, and unpaid-for Republican tax handouts to the wealthy and corporations blew up the deficit. The Inflation Reduction Act represents a deliberate departure from trickle-down economics.”
And the group credited the IRA for requiring corporations to pay a minimum 15 percent tax on their profits and assessing a 1 percent tax on runaway corporate stock buybacks. It also praised the legislation for providing $80 billion in IRS funding after decades of budget cuts (unfortunately, policymakers rescinded $20 billion those additional resources last spring in budget negotiations). The funds are already helping the agency crack down on wealthy and corporate tax cheats, answer phones, process returns, and create a pilot for a direct file service.
Even as advocates hailed the IRA’s place in history, they cautioned that Congress’ work is far from done. Said Prosperity Now’s Sims:
“We believe that Congress must invest in children and their families by building a climate economy that creates opportunities to develop new businesses and obtain good jobs that address climate change, and by creating homes that everyone can afford. To ‘celebrate’ the anniversary of the Inflation Reduction Act, let’s call on Congress to protect the gains we have made and to get us closer to an economy that works for everyone.”