FACT SHEET: How the Inflation Reduction Act is creating a brighter future for young Americans
With the signing of the Inflation Reduction Act, President Biden is making good on his promise to address 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 bills. It is the most aggressive action we have taken to address the climate crisis. It will cut the deficit and ask the super-rich and corporations to pay their fair share. And nobody who makes less than $400,000 a year pays a penny more in taxes.
President Biden and Congressional Democrats beat back the special interests to pass this historic law that will build a better future for young Americans by cutting costs, promoting environmental justice, while building a cleaner future and stimulating the economy from the bottom up and in the community middle grows.
COMBAT THE CLIMATE CRISIS
This law represents the most aggressive action taken by the US to address the climate crisis and create clean energy solutions in American history. The law will lower energy bills for families and create thousands of good jobs, while reducing climate pollution and ensuring we have a clean, safe energy future. It will:
Reduce pollution: The law would reduce greenhouse gas emissions by about a gigatonne (one billion tons) in 2030 and position America to meet President Biden’s climate goals, halve climate pollution by 2030, and achieve net-zero emissions by 2050 at the latest .
Advanced environmental justice: Climate change is disproportionately impacting low-income and communities of color. The law will work to reduce legacy issues and ensure clean energy opportunities reach all Americans through:
- Creation of new “Environmental Justice Block Grants” to support community-led projects across the country, including tackling pollution in port communities where air pollution is particularly deadly.
- Creating a new clean energy and sustainability accelerator that will launch state and local clean energy finance banks that will help underprivileged communities reap the benefits of the law.
- Providing finance to tribal communities to bring clean, zero-emission electricity to homes and build their climate resilience.
Reduce energy costs: The law makes it more affordable to buy energy efficient and electrical appliances, home improvement supplies and more to reduce energy bills. Overall, the law puts America on track to meet the President’s climate goals, allowing each family to save an average of $500 a year on their energy bills and gain support for:
- Efficient Appliances and Home Upgrades – The law provides direct consumer rebates when households need to upgrade stoves, water heaters, ranges, stoves or other household appliances with more energy efficient and electrical appliances. Households can save up to 30% with housing project tax credits on windows, doors, insulation or other weatherproofing measures that prevent energy from escaping homes. These upgrades can reduce future utility bills by at least $350 per year.
- Home Energy Systems – When homes choose to install solar panels on their roofs, they can save up to 30% with tax credits. For example, an average family installing a solar system with this loan would save $9,000 on electricity bills over the life of the system, or about $300 per year.
- Cleaner Cars and Trucks – The law will lower the sticker price of EVs and give Americans tax credits of up to $7,500 for new and $4,000 for used EV purchases. This measure could help young Americans in particular to buy their first car and skip the gas pump for good.
REDUCED HEALTHCARE COSTS
Since 2014, the Affordable Care Act (ACA) has helped provide quality health insurance coverage for people who do not receive coverage through their work. Yet health insurance remains unaffordable for many Americans. During his campaign, President Biden pledged to build on the ACA by making bonus tax credits more generous and reducing health premiums for working families. The President’s US bailout honored that commitment by improving bonus tax credits. However, these improvements will expire at the end of 2022 Anti-Inflation Act extends it to 2025:
- 13 million Americans save hundreds of dollars a year. About 13 million Americans save an average of about $800 in health insurance premiums annually. Young people will also benefit significantly, as more than 3.5 million people aged 18-34 have health care plans in the market.
- About 3 million more people will be supplied with this extension next year. Although the uninsured rate fell to its lowest level in US history in early 2022, young people aged 18-24 remain the most uninsured.
- By improving access to health insurance, the law will improve health outcomes; improve financial security by reducing medical debt and rent and mortgage arrears; and small racial disparities in health care and access to care.
MAKE TAX LEGISLATION FAIR
The 2017 tax bill introduced by President Trump and congressional Republicans only made an unfair tax system worse. The Inflation Reduction Act of 2022 is a crucial step forward to make our tax laws fairer. It will increase revenue by:
- Ensuring high-income people and large corporations pay the taxes they already owe.
- Crackdown on large, profitable companies that currently get away with not paying federal income taxes.
- Imposing a 1% premium on company share buybacks to encourage companies to invest.
Not only will the Legislature’s tax reforms boost revenue to fund much-needed investments to cut costs and combat climate change, they’re also a key part of building an economy that rewards work rather than wealth and doesn’t get the rich and powerful off lets play according to a separate set of rules. Millions of working families will have better access to the benefits they are entitled to under the IRS and have their questions answered quickly and efficiently thanks to the law’s transformative investments in the Internal Revenue Service. And no family making less than $400,000 a year will see their taxes go up a single penny.