Inflation Reduction Act of 2022

We have received a few communications from clients who were confused about what was in this bill. We want to try and clarify a few things. Congress passed a piece of legislation that touches just about every aspect of American lives. The full extent of the Inflation Reduction Act of 2022 is too large to completely cover here, but these are some highlights:

• 15% minimum tax on corporations with over $1 billion in revenues
  • Purportedly this will generate an estimated $222.2 billion in additional tax revenues
  • 1% excise tax on companies that engage in buying back their own stock
• The new law gives Medicare the green light to negotiate collectively on drug prices
  • A $35 cap on Medicare Part D co-payments for insulin treatments.
  • Americans who are not yet age 65 will see $64.1 billion in subsidies to expand the Affordable Care Act and counteract rising health insurance premiums.
• Tax credits for wind, solar, geothermal and nuclear electricity facilities and clean energy rebates for residential buildings and electric cars
  • There are strict income limits to qualify for Electric Vehicle Tax Credits
  • Provides tax subsidies for installing heat pumps and solar panels and purchasing cars that don’t run on gasoline.
  • The U.S. Postal Service will get zero-emissions trucks
  • Companies will be able to qualify for tax incentives if they find ways to manufacture using fewer emissions and less electricity.
• What’s NOT in this bill?
  • Any additional taxes on American citizens.
  • A proposed surtax on all income above $10 million

Whether this bill will live up to its name and reduce inflation remains to be seen.

Regards,

Warren D. Stribling, IV, CFP^®
Principal
warren.stribling@striblingwhalen.com

Brian E. Whalen, CFP^®, CIMA^®, AIF^®
Principal
brian.whalen@striblingwhalen.com

Jacob Beauchamp, AAMS^®
Financial Advisor
jacob.beauchamp@striblingwhalen.com

SOURCES:

• https://www.nytimes.com/interactive/2022/08/13/upshot/whats-in-the-democrats-climate-health-bill.html
• https://www.npr.org/2022/08/11/1116229743/inflation-reduction-act-questions-answered
• https://taxfoundation.org/inflation-reduction-act/

Disclosure: Any opinions are those of the author and not necessarily those of Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. All opinions are as of this date and are subject to change without notice.