Inflation Reduction Act

Lowers Prescription Drug & Health Care Costs

  • Requires Medicare to directly negotiate lower prescription drug prices for drugs without market competition. The new prices will take effect in 2026.
  • Stops drug price hikes when a manufacturer raises the Medicare price of a drug (including generics) above the rate of inflation, the manufacturer will be required to pay back the entire price above inflation.
  • Caps the monthly out-of-pocket cost for insulin to $35 for Medicare beneficiaries.
  • Caps out-of-pocket spending on drugs at $2,000 annually for Medicare beneficiaries.
  • Beginning in 2023, all CDC-recommended vaccines will be free for Medicare enrollees.
  • Saves an average of $800 per year for 13 million people on their health insurance plans through the Affordable Care Act. These savings extend through 2025.
     

Energy & Climate

  • Lowers greenhouse gas emissions by 40 percent by 2030 through $369 billion in tax incentives, grants, and loans for clean energy and other technology to reduce emissions – the largest investment to address climate change in our country’s history.
  • Offers up to $7,500 in tax credits to purchase North American-built electric vehicles and $4,000 in tax credits for used electric vehicles;
  • Offers tax credits to make energy efficient home improvements including up to $2,000 for an energy-efficient heat pump, up to $9,100 for improvements to electric panels, wiring, and home insulation and a 30 percent credit for the installation of home solar panels.
  • Creates a polluter fee of $900 per metric ton of methane emissions, a greenhouse gas 25 times more potent than carbon dioxide. The fee increases to $1,500 per metric ton after two years.
     

Lowering the Deficit

  • Creates a 15% minimum tax on corporations reporting $1 billion or more in income, raising $258 billion in revenue from about 150 corporations and closes the loophole allowing certain large, profitable corporations to pay zero in income taxes;
  • Invests $80 billion in the IRS over 10 years to improve taxpayer services, expedite refunds, and strengthen tax collection and enforcement on corporations and high-income earners to recover $204 billion in taxes that are owed but not collected;
  • Imposes a new one percent tax on stock buybacks; and
  • No new taxes on small businesses or families making $400,000 or less.