FACT SHEET: The Inflation Reduction Act Supports Workers and Families
By signing the Inflation Reduction Act, President Biden is delivering on his promise to build an economy that works for working families. President Biden is the most pro-worker, pro-union President in history, and the Inflation Reduction Act builds on that legacy. President Biden and Congressional Democrats beat back special interests to pass this historic law that lowers costs for families, creates good-paying jobs for workers, and grows the economy from the bottom up and the middle out.
The Inflation Reduction Act lowers prescription drug costs, health care costs, and energy costs. It’s the most aggressive action on tackling the climate crisis in American history, which will lift up American workers and create good-paying, union jobs across the country. It’ll lower the deficit and ask the ultra-wealthy and corporations to pay their fair share. And no one making under $400,000 per year will pay a penny more in taxes.
CREATE CLEAN ENERGY JOBS
The Inflation Reduction Act creates good-paying union jobs that will help reduce emissions across every sector of our economy. As President Biden promised when running for president, the law includes some of the strongest labor protections and incentives ever attached to clean energy tax credit programs. It will:
- Incentivize prevailing wages. The expanded tax credits for energy efficient commercial buildings, new energy efficient homes, and electric vehicle (EV) charging infrastructure will include bonus credits for businesses that pay prevailing wages and hire registered apprentices, ensuring local wages are not undercut by low-road contractors.
- Stop companies from ripping off workers. It will penalize companies that promise to pay prevailing wages but don’t follow through, and workers who are owed prevailing wages will receive the difference, plus interest.
- Make it in America. For the first time ever, the Inflation Reduction Act establishes Make it in America provisions for the use of American-made equipment for clean energy production. The law provides expanded clean energy tax credits for wind, solar, nuclear, clean hydrogen, clean fuels, and carbon capture, including bonus credits for businesses that pay workers a prevailing wage and use registered apprenticeship programs.
MAKE THE TAX CODE FAIRER
The Inflation Reduction Act will make our tax code fairer by cracking down on millionaires, billionaires, and corporations that evade their obligations, and making sure the largest corporations pay their fair share. No family making less than $400,000 per year will see their taxes go up by a single cent. The Inflation Reduction Act will raise revenue by:
- Going after tax dodgers, ensuring the wealthy and large corporations pay the taxes they already owe.
- Cracking down on the largest profitable corporations that currently get away with paying little to no federal income tax, instituting a minimum corporate tax of 15%.
- Imposing a 1% surcharge on corporate stock buybacks, to encourage businesses to invest instead of enriching CEOs or funneling profits tax-free to shareholders.
- Making transformational investments in taxpayer service so that regular Americans can get their questions answered and access the credits and benefits they are entitled to.
The law’s tax reforms won’t just raise revenue to finance critically needed investments to lower costs for working families and combat climate change, they are also an important component of building an economy that rewards work rather than wealth and doesn’t let the rich and powerful get away with playing by a separate set of rules.
REVITALIZE AMERICAN MANUFACTURING
President Biden made a promise to re-energize American manufacturing, and he kept his promise. The President already has the strongest record of growing manufacturing jobs in modern history, and this law invests in American workers and industry. The Inflation Reduction Act will:
- Build American clean energy supply chains, by incentivizing domestic production in clean energy technologies like solar, wind, carbon capture, and clean hydrogen.
- Support American workers with targeted tax incentives aimed at manufacturing U.S.-sourced products such as batteries, solar, and offshore wind components, and technologies for carbon capture systems.
- Strengthen America’s manufacturing base. The Inflation Reduction promotes domestic sourcing and American jobs. For example, clean energy tax credits are increased if the amount of American steel used in wind projects meets the domestic content threshold, and bonus credits apply to employers who use of prevailing wages and apprenticeships, ensuring that federal tax policy supports good-paying, high-skilled jobs.
- Create good-paying union jobs in energy communities. Clean energy tax credits will be increased by 10% if the clean energy projects are established in communities that have previously relied upon the extraction, processing, transport, or storage of coal, oil, or natural gas as a significant source of employment, creating jobs and economic development in the communities that have powered America for generations.
LOWER HEALTH CARE COSTS
President Biden has followed through on his promise to lower the cost of prescription drugs. The Inflation Reduction Act will protect Medicare recipients from catastrophic drug costs by phasing in a cap for out-of-pocket costs and establishing a$35 cap for a month’s supply of insulin. And, as an historic win, Medicare will be able to negotiate prices for high-cost drugs for the first time ever. For union members or family members who benefit from the Affordable Care Act, it extends health insurance premium subsidies.