On 16th August, 2022, the Inflation Reduction Act, 2022 was signed by the President of USA. The Act includes law over climate, health and energy.
Key points:
- Under deficit reduction, the Act imposes 15% of corporate minimum tax based on the financial income statement which will come in effect in the taxable year after December 31, 2022. The present Act also stated that 1% of excise tax will be imposed on the repurchase of stocks by the domestic corporation after 2022.
- Health care costs will be reduced by $800 per year as Centers for Medicare and Medicaid Services(CMS) will negotiate the prices of certain prescription drugs(approximately 100 drugs) under Medicare starting in the year 2026.
- Maximum prices for brand-name drugs will be negotiated by CMS. It will provide free vaccines from 2023 and the cost of the insulin will be $35 per month. The expense over medicines will be reduced to $2,000 in 2025.
- According to the Act, from 2024 tax credits will be provided for producing electricity from renewable resources, especially from wind, biomass, geothermal, solar, trash and hydrokinetic resources. There will also be tax credits for production of clean hydrogen and domestic clean fuel production in 2025.
- The Act encourages the purchase and use of plug-in electric vehicles by creating and modifying the refundable tax credit.
- Under the Committee on Agriculture, Nutrition and Forestry variety of programs related to conservation and renewable energy will be funded to increase awareness against climate change. There will be funding to USDA (Department of Agriculture) to initiate the program to decrease the carbon emission by 40% by 2030 and for forest restoration, wildlife prevention.
- Funding for affordable housing and projects which are designed to increase the energy and water supply for such houses.
- Electricity will be reduced to $500 to $1000 per year. Rebates will be provided to homeowners for saving overall energy.
- Loans will be provided to manufacture vehicles that emit either low or no amount of greenhouse gas.
- The Act provides funding to the Environmental Protection Agency(EPA) to install equipment and technology to reduce pollution at ports and to identify and reduce emissions from diesel engines. Funds to reduce methane emissions from petroleum and natural gas systems.
- $60 billion is invested to create clean manufacturing jobs to protect families and small businesses.