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Why Europeans Fear The Inflation Reduction Act So Much
The Inflation Reduction Act of 2022 is a historic piece of legislation that will make a significant down payment on deficit reduction while also investing in domestic energy production and manufacturing, as well as reducing carbon emissions significantly by 2030. The bill will also authorize Medicare to negotiate for prescription drug prices and extend the Affordable Care Act expanded program through 2025.
The FY2022 Budget Reconciliation bill proposes to invest an estimated $300 billion in Deficit Reduction and $369 billion in Energy Security and Climate Change programs over the next decade. This agreement includes measures to reform permitting processes, which are essential for unlocking domestic energy and transportation infrastructure projects.
The Inflation Reduction Act provides incentives in the form of direct pay tax credits worth an estimated $216 billion, or over half of the total allocated $394 billion climate and energy funds. These credits are designed to lower the cost of investing in clean energy projects, and reduce the costs associated with compliance for businesses that use green technology.
In addition to the direct pay tax credits, businesses may also be eligible for other incentive-based programs such as renewable energy production tax credits (PTCs) and investment tax credits…
