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Joint Economic Committee Democrats Chairman - Rep. Don Beyer (D-VA)

The Economic Impact of the Inflation Reduction Act

The Inflation Reduction Act will cut household energy and health care costs for millions of Americans in the near term, while also reducing the budget deficit and fighting inflation. The bill is more than paid for by asking wealthy corporations to pay their fair share in taxes, boosting IRS funding to crack down on wealthy tax cheats and allowing the federal government to negotiate drug prices.

Leading economists, including Nobel Prize winners and former Treasury secretaries, Council of Economic Advisors chairs and a Congressional Budget Office (CBO) director, agree that by reducing the deficit, the bill will place downward pressure on inflation. The non-partisan Committee for a Responsible Federal Budget and Moody’s Analytics also conclude that the bill will reduce inflationary pressure. CBO estimated that the bill will reduce the deficit by $238 billionover the next decade, while the Committee for a Responsible Federal Budget estimated that it will reduce the deficit by $1 trillion over two decades.



THE INFLATION REDUCTION ACT LOWERS HEALTHCARE COSTS, FIGHTS INFLATION WHILE CUTTING THE DEFICIT

The Inflation Reduction Act of 2022 will improve Americans’ health while making both health insurance and prescription drugs more affordable for millions of Americans. The health provisions of the bill alone will cut costs for working families and seniors alike, shore up Medicare’s finances and save the government a net of $173 billion in total over ten years. 

The Inflation Reduction Act will reduce the federal budget deficit and curb inflation over the long-run, while investing in the long-term health and economic security of millions of Americans.

ACTING ON CLIMATE WILL FIGHT INFLATION, LOWER COSTS AND GROW THE ECONOMY FASTER FOR DECADES TO COME

Acting on climate change will reduce inflationary pressures, lower costs for families and grow the economy. Inadequate action on climate change has already created large economic cost for families and communities and the cost of inaction will grow over time.

The Inflation Reduction Act of 2022 will make the largest investments in fighting climate change and in clean energy production in American history. These investments will lower costs for families and businesses, improve productivity, grow the economy and reduce inflationary pressure for decades to come.

THE INFLATION REDUCTION ACT WILL MAKE THE TAX SYSTEM FAIRER AND STRENGTHEN THE ECONOMY

The Inflation Reduction Act will close tax loopholes and increase enforcement to ensure that big corporations and the wealthy pay what they owe. At the same time, it will deliver tax breaks to lower- and middle-income households to reduce household energy and health care costs for millions of Americans. 

The bill includes three major tax reforms: instituting a corporate minimum tax on the book income of highly profitable corporations, adding a 1% tax on corporations when they buy back their own stock and investing $80 billion in the IRS over the next 10 years to increase tax enforcement. These reforms will fight inflation, make the tax system fairer, generate revenue and reduce the budget deficit without raising taxes on middle- or lower-income workers and families.