Yesterday, on a party line vote of 220-207, House Democrats passed the "Inflation Reduction Act of 2022." It's seen as the most significant energy- and climate- related legislation in American history and the most significant health care legislation since the Affordable Care Act in 2010. President Biden is expected to sign the bill next week.
Here are the biggest changes the bill makes:
Creation of a 15% corporate minimum tax rate: Corporations with at least $1 billion in income will have a new tax rate of 15%. Taxes on individuals and households won’t be increased. Stock buybacks by corporations will face a 1% excise tax.
Prescription drug price reform: One of the most significant provisions of the Inflation Reduction Act will allow Medicare to negotiate the price of certain prescription drugs, bringing down the price beneficiaries will pay for their medications. Medicare recipients will have a $2,000 cap on annual out-of-pocket prescription drug costs, starting in 2025.
IRS tax enforcement: The IRS has been sounding the alarm for years about being underfunded and being unable to deliver on its duties. The bill invests $80 billion in the nation’s tax agency over the next 10 years.
Affordable Care Act (ACA) subsidy extension: Currently, medical insurance premiums under the ACA are subsidized by the federal government to lower premiums. These subsidies, which are scheduled to expire at the end of this year, would be extended through 2025. Approximately 3 million Americans could lose their health insurance if these subsidies aren’t extended, according to the U.S. Department of Health and Human Services.
Energy security and climate change investments: The bill includes numerous investments in climate protection, including tax credits for households to offset energy costs, investments in clean energy production and tax credits aimed at reducing carbon emissions.
This is potentially the crown jewel of the laws passed in the first two years of the Biden Presidency, taking on issues Democrats have long sought to address on climate change, affordable health care and tax reform. It's not a perfect bill, but it's a good bill that Democrats managed to pass with universal Republican opposition and the full force of special interest money (Pharma, the American Petroleum Institute, etc.) arrayed against them.
Savor this significant victory for America and the party defending it.
