The Inflation Reduction Act makes urgent investments to lower prescription drug costs, health care costs, and energy costs to create opportunities for America’s 33 million small businesses and innovative startups. It is the most aggressive action we have taken to confront the climate crisis. It will help the Fed tackle inflation by reducing the deficit. The super wealthy and large corporations are asked to pay their fair share, and no small business or family making under $400,000 per year will pay a penny more in taxes.
Lowering Costs for Small Businesses
The Inflation Reduction Act will reduce costs for small businesses by maintaining lower health care costs, supporting energy-saving investments, and bolstering supply chain resiliency.
Preserving Critical Support for Small Business Health Care Costs.
The Inflation Reduction Act would preserve the American Rescue Plan’s premium tax credit supports for Affordable Care Act (ACA) plans by extending them through 2025. According to a recent analysis of 2021 tax data issued by the Department of Health and Human Services, the ACA Marketplace serves as an important source of coverage for 2.6 million small business owners and self-employed adults. Moreover, small business owners and self-employed people make up 25 percent of Marketplace enrollment among working-age adults. Since the implementation of the ACA, the uninsured rate for the self-employed has fallen dramatically from 30% in 2013 to 20.5% in 2019, resulting in 1.3 million less uninsured self-employed adults. Overall, about 13 million Americans will save an average of about $800 annually on their health insurance premiums compared to what they would pay without the Inflation Reduction Act. This investment will continue to spur new business starts and job creation, as entrepreneurs may take the leap of starting a business without the risk of going uninsured.
Cutting Energy Costs for Small Businesses.
The Inflation Reduction Act includes a number of provisions that will save small business owners money on energy costs:
- Small businesses can receive a tax credit that covers 30% of the cost of switching over to low-cost solar power – lowering operating costs and protecting against the volatile energy prices that are currently squeezing small businesses.
- Small business building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills.
- Small businesses that use large vehicles like trucks and vans will benefit from tax credits covering 30% of purchase costs for clean commercial vehicles, like electric and fuel cell models.
As small businesses save on energy costs, they will also help combat the climate crisis. The greater frequency and scale of natural disasters has put more small businesses and communities at risk of devastation and disruption. The Inflation Reduction Act’s historic action on climate change will provide economic stability and growth for Main Streets across the country.
Lowering the Deficit to Fight Inflation. The Inflation Reduction Act is more than fully paid for and will drive deficit reduction over the course of the coming decade. This will build upon the significant debt reduction that has taken place under the Biden-Harris Administration. The Administration is projected to achieve more than $1.5 trillion in deficit reduction this year, after reducing the deficit by more than $350 billion last year. This will be the largest ever one-year decline in our country’s history, and will leave the deficit lower than the Congressional Budget Office projected it would be before the passage of the American Rescue Plan. And numerous leading economists and commentators have argued that, by building on the deficit reduction we have achieved to date under President Biden with hundreds of billions in additional deficit reduction, the Inflation Reduction Act will help ease inflationary pressure. When small businesses operate with more price stability, on costs from gas to wages, it will be easier for entrepreneurs to plan and grow their businesses.
Lower Prescription Drug Costs for Seniors.
Many small businesses are owned by seniors. Americans pay 2-3 times more for their prescription drugs than people in other wealthy countries. High prices contribute to racial and ethnic health inequities. The Inflation Reduction Act will help close the gap in access to medication by improving prescription drug coverage and lowering drug prices in Medicare. The law:
- Caps the amount that seniors will have to pay for prescription drugs they buy at the pharmacy at $2,000 a year.
- Caps the amount that seniors will have to pay for insulin at $35 for a month’s supply.
- Provides access to a number of additional free vaccines, including the shingles vaccine, for Medicare beneficiaries.
- Will further lower prescription drug costs for seniors by allowing Medicare to negotiate the price of high-cost drugs and requiring drug manufacturers to pay Medicare a rebate when they raise prices faster than inflation.
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