FACT SHEET: How the Inflation Reduction Act Builds a Better Future for Young Americans
By signing the Inflation Reduction Act, President Biden is delivering on his promise to meet the climate crisis and build an economy that works for working families. The Inflation Reduction Act makes historic investments in America’s future while lowering health care and energy costs. It’s the most aggressive action we have taken to confront the climate crisis. It’ll lower the deficit and ask the super wealthy and corporations to pay their fair share. And no one making under $400,000 per year will pay a penny more in taxes.
President Biden and Congressional Democrats beat back the special interests to pass this historic legislation that builds a brighter future for young Americans by lowering costs, advancing environmental justice while building a cleaner future, and growing the economy from the bottom up and the middle out.
TACKLE THE CLIMATE CRISIS
This law represents the single most aggressive action the U.S. is taking to tackle the climate crisis and create clean energy solutions in American history. The law will bring down energy costs for families and create thousands of good jobs, all while reducing climate pollution and ensuring that we have a clean, secure future energy supply. It will:
Reduce Pollution: The law would reduce about a gigaton (a billion metric tons) of greenhouse gas emissions in 2030 and position America to meet President Biden’s climate goals of cutting climate pollution in half by 2030 and reaching net-zero emissions by no later than 2050.
Advance Environmental Justice: Climate change disproportionately impacts low-income communities and communities of color. The Act will work to alleviate legacy pollution and to ensure that clean energy opportunities reach all Americans through:
- Creating new Environmental Justice Block Grants—which will support community-led projects across the country, including tackling pollution in port communities where air pollution is especially deadly.
- Creating a new Clean Energy and Sustainability Accelerator that will seed state and local clean energy financing banks, which will help disadvantaged communities access the benefits of the law.
- Providing funding for Tribal communities to bring clean, zero-emissions power to homes and to boost their climate resilience.
Cut Energy Costs: The law makes it more affordable to purchase energy efficient and electric appliances, home improvements, and more to bring down energy costs. Overall, the law puts America on track to meet the President’s climate goals, which will save every family an average of $500 per year on their energy bills, providing support for:
- Efficient Appliances and Home Upgrades – The law includes direct consumer rebates when households need to upgrade furnaces, water heaters, stoves, ovens, or other home appliances with more energy efficient and electric appliances. Households can save up to 30% with tax credits for home construction projects on windows, doors, insulation, or other weatherization measures that prevent energy from escaping homes. These upgrades can lower future utility bills by at least $350 per year.
- Home Energy Systems – When households want to install solar on their roof they can save up to 30% with tax credits. For example, average family installing solar using this credit would save $9,000 on their electricity bill over the life of the system, or about $300 per year.
- Cleaner Cars and Trucks – The law will bring down the sticker price of electric vehicles, providing Americans tax credits of up to $7,500 for new and $4,000 for used electric vehicle purchases. This measure could especially help young Americans buy their first car and skip the gas pump forever.
LOWER HEALTH CARE COSTS
Since 2014, the Affordable Care Act (ACA) has helped provide quality health insurance coverage for people who don’t receive coverage through their jobs. Still, health insurance remains unaffordable for many Americans. During his campaign, President Biden promised to build on the ACA by making premium tax credits more generous and lowering health care premiums for working families. The President’s American Rescue Plan kept that commitment by improving premium tax credits. However, those improvements are set to expire at the end of 2022. The Inflation Reduction Act extends them through 2025:
- Saving 13 Million Americans Hundreds of Dollars per Year. About 13 million Americans will save an average of about $800 annually on health insurance premiums. Young people will also benefit significantly, as more than 3.5 million people ages 18-34 are on marketplace health care plans.
- Expanding Health Insurance. About 3 million more people will have coverage next year with this extension. Although the uninsured rate fell to the lowest level in U.S. history in early 2022, young people ages 18-24 continue to be the most likely to be uninsured.
- Making Health Care Better and Fairer. By increasing access to coverage, the law will improve health outcomes; improve financial security by reducing medical debt and rent and mortgage delinquencies; and narrow racial disparities in health coverage and care access.
MAKE THE TAX CODE FAIRER
President Trump and Congressional Republicans’ 2017 tax law only made an unfair tax system worse. The Inflation Reduction Act of 2022 is a critical step forward in making our tax code fairer. It will raise revenue by:
- Ensuring that high-income people and large corporations pay the taxes they already owe.
- Cracking down on large, profitable corporations that currently get away with paying no federal income tax.
- Imposing a 1% surcharge on corporate stock buybacks that will encourage businesses to invest.
The legislation’s tax reforms won’t just raise revenue to finance critically needed investments to lower costs and combat climate change, they are also an important component of building an economy that rewards work rather than wealth and doesn’t let the rich and powerful get away with playing by a separate set of rules.
Millions of working families will have better access to the benefits they are entitled to under the tax code and be able to get their questions answered quickly and efficiently, thanks to the law’s transformational investments in the Internal Revenue Service. And, no family making less than $400,000 per year will see their taxes go up by a single cent.
Joseph R. Biden, FACT SHEET: How the Inflation Reduction Act Builds a Better Future for Young Americans Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/357295