WORTH THE READ
What the Inflation Reduction Act Means
August 18, 2022 - 2 MINUTE READ
With the new bill being signed into law this week by President Biden, there are several facets of the law that could help reduce expenses for American consumers. A few of these items include: Energy-efficient purchases, health insurance expenses, and drug prices for seniors. The bill caps senior's out-of-pocket prescription costs at $2,000 per year. The bill also gives Medicare the ability to negotiate drug prices, something Congress has been calling for.1
The biggest impact of the new bill is expected around large corporations, requiring them to pay a minimum income tax of 15% and a1% tax on stock buybacks.1 The IRS is also benefiting, receiving an additional $80 billion in funding. This will allow the agency to hire auditors and give them more resources to help uncover tax fraud.
It’s yet to be determined the long term effects of the new bill but calculations done by the Joint Committee on Taxation found the new bill could reduce the federal deficit by $300 billion over time. Critics of the bill are skeptical and believe the bill will increase prices over time and push inflation up.1 Time will tell how this new bill will affect Americans moving forward and the effects it will have on the economy.