what is the inflation reduction act

The Inflation Reduction Act is a law signed by President Biden on August 16, 2022. It is a significant action taken by Congress to address inflation and includes new and reinstated tax laws that affect individuals and businesses. The act contains $500 billion in new spending and tax breaks that aim to boost clean energy, reduce healthcare costs, fund the Internal Revenue Service, and improve taxpayer compliance. The act aims to catalyze investments in domestic manufacturing capacity, encourage procurement of critical supplies domestically or from free-trade partners, and jump-start R&D and commercialization of leading-edge technologies such as carbon capture and storage and clean hydrogen. The act also allocates money directly to environmental justice priorities and requires recipients of many funding streams to demonstrate equity impacts. The act includes investment programs related to clean energy, climate mitigation and resilience, agriculture, and conservation. The act allows Medicare to negotiate drug prices and caps out-of-pocket costs to $2,000. The act also lowers ACA health care premiums for millions of Americans. The act enacts historic deficit reduction to fight inflation, lowers energy costs, increases cleaner production, and reduces carbon emissions by roughly 40 percent by 2030. The act makes the biggest corporations and ultra-wealthy pay their fair share, but there are no new taxes on families making $400,000 or less and no new taxes on small businesses.