Inflation Reduction Act Targets Climate Change, Health Care Costs, Taxes
President Joe Biden signed on Tuesday the Inflation Reduction Act into law, which aims to lower health care costs and raise taxes on corporations. The law includes $369 billion for climate and energy policies; $64 billion to reduce health insurance costs; and a minimum 15% corporate tax rate for companies that earn more than $1 billion a year.
"The $437 billion spending package is expected to raise $737 billion in revenue over the next decade, the biggest share coming from reductions in drug prices for Medicare recipients and tax hikes on corporations," CNBC reported. "Roughly $124 billion is expected to come from increased IRS enforcement, meaning tougher and more frequent audits for the wealthy. It's projected to reduce the deficit by more than $300 billion over a decade."
Some sources question the legislation's effect on inflation. A CBS News article reports that a model from the University of Pennsylvania's business school, the Wharton School, finds that "the bill won't measurably affect inflation, and the Congressional Budget Office called the impact on inflation 'negligible' this year before helping lower inflation in later years." Biden also has stated that it may take time for Americans to feel the effect of the law. "There may be visible progress in a year or two or three years … but it's not going to happen in the next two, three, four months," he says.