On August 16, President Biden signed into law the Inflation Reduction Act (IRA)—a sweeping tax, health, and climate bill that will make a historic down payment on deficit reduction to fight inflation; invest in domestic energy production and manufacturing; and reduce carbon emissions by roughly forty percent by 2030. The law will also allow Medicare to negotiate for prescription drug prices and extend the expanded Affordable Care Act program for three years, through 2025.
Here is a short summary of what this wide-ranging new law contains:
What will the IRA do for the climate?
• Create up to nine million jobs in clean energy, clean manufacturing, and green transportation.
• Reduce greenhouse gasses by forty percent by 2030.
• Dedicate sixty billion dollars for environmental justice in communities hardest hit by climate change and fossil fuels.
How will this bill impact healthcare costs?
• Restrict insulin costs to $35 per month for Medicare recipients.
• Cap out-of-pocket costs for medications to a maximum of $2,000 per year for seniors (down from the current $10,000+ a year for the costliest drugs).
•Allow Medicare to negotiate lower prices on some prescription drugs for seniors on Medicare starting in 2026
What are the tax implications?
• No new taxes on any family making $400,000 or less, and no new taxes on small businesses (despite the lies Republicans are spewing)
•A fifteen percent minimum tax rate on the wealthiest corporations
•A one percent tax on stock buybacks used to enrich wealthy shareholders