President Joe Biden recently signed the Inflation Reduction Act into law, a bill aimed at lowering pharmaceutical drug prices, reforming the corporate tax code, and combatting the effects of climate change. The bill aimed to increase supply chains across multiple industrial markets largely involved in the green energy sector, which will generate more employment opportunities across the country.
The entirety of the bill is supposed to reduce the federal deficit and is paid for by increasing the tax rate on corporations. The 15 percent tax will be imposed on corporations that profit over $1 billion a year, generating over $300 billion annually.
An excise tax of 1 percent gets imposed when corporations buy back their stocks but will not take effect until next year.
The bill includes a stipulation that allows the federal health secretary to negotiate drug prices for Medicare, but it has limitations and will not take effect until 2026. Ten different drugs are up for negotiation when it takes effect and will double by 2029.
Democrats supported a measure that would have capped the cost of insulin at $35 a month, but it was ruled out of order by Senate parliamentarian Elizabeth MacDonough. MacDonough ruled the cap applied to government programs but not private insurance companies.
The bill caps prescription drug payments for those on Medicare who are paying out of pocket for their prescription drugs at $2,000, taking effect in 2025.
Tax incentives worth $375 billion are included to incentivize corporations and consumers to shift toward focusing on green energy production and consumption. Tax credit incentives include $60 billion toward clean energy manufacturing, $30 for increased wind and solar energy production, and utilizing nuclear power and technologies designed to remove carbon emissions from the air.
The bill also includes $300 billion to be allocated for energy and climate reform, which is almost half the $555 billion the Democrats had initially asked for. The amount is still the largest in US history.
There is also an extra $60 billion for increased manufacturing in renewable energy infrastructures like solar panels and wind turbines.
Individual citizens will also be eligible for tax credits if they decide to orient their behavior toward green energy consumption by purchasing things like electric vehicles and transitioning their homes to be more energy efficient.
Climate experts broadly support the bill’s passage. It aims to reduce greenhouse emissions by 40 percent by the end of the decade. President Biden had originally wanted greenhouse gas emissions reduced by 50 percent.
Many different job sectors will see an increase in job opportunities due to the Inflation Reduction Act.
The automotive industry will see an increase in the material supply chain for auto body manufacturing, which will heavily support increased demand for steel, aluminum, and fiberglass. Demand for rechargeable batteries and hardware components like power inverters will also increase, and charging stations for electric vehicles will become more available.