On Aug. 16, President Biden signed the Inflation Reduction Act of 2022 into law. The IRA is, at heart, a climate bill.
Lake Mead at a historic low; extreme heat and catastrophic floods from Kentucky to Pakistan reinforce the need to take serious action to reduce greenhouse gas emissions – a position supported by a majority of Americans. According to the latest Yale climate opinion survey, 72% of Americans acknowledge global warming is happening, 57% think the main cause is human activities, and 61% think Congress should do something about it. The IRA will reduce U.S. GHG emissions roughly 40% by 2030. In addition, the bill will:
• Lower energy costs and increase clean energy production. Electricity from solar and wind is already cheaper than coal and gas even without tax credits. The transition is underway. But it needs to happen faster if we are to avoid the worst impacts of a warming planet. The extension of tax credits will give clean energy companies and investors needed confidence to accelerate renewable projects and reduce electricity costs for Americans.
• Provide tax credits for new and used electric vehicles. The bill extends the $7,500 tax credit for new electric cars and trucks and adds a $4,000 credit for some used EVs. The credits are phased out for high-income earners; no one is subsidizing EVs for rich people! And importantly for Nevada mining companies, the majority of the battery and rare-earth minerals would need to be sourced from the U.S. or its free trade partners. This will spur American battery manufacturing and rare-earth mineral production that will reduce our dependence on China for these materials. Incidentally, these rare-earth minerals are used in military weapons and systems, so this is a national security issue also.
• Provide subsidies for residential heat pumps, electric water heaters, solar panels, and energy efficiency upgrades. In Nevada, hundreds of thousands of low- and middle-income households will be eligible for rebates. This will lower their energy costs. Small businesses will get tax credits for energy efficiency improvements, solar power, and electric truck and van fleets.
• Provide incentives to help nurture domestic clean hydrogen, direct-air-carbon-capture, and advanced nuclear industries. The Republicans don’t have a plan to seriously reduce our GHG emissions, but they have supported research in these three areas. These are long-term R&D projects that will be needed if we are to get to net-zero emissions.
• Expand good-paying jobs. In 2021 there were over 32,000 Nevada workers employed in clean energy jobs. Between now and 2030, the IRA will bring an estimated $2.7 billion to Nevada for clean power generation and storage, expanding those opportunities.
• Put a fee on methane leakage from oil and gas facilities and infrastructure. Methane is one of the most potent greenhouse gases.
Other elements in the bill will allow Medicare to negotiate drug prices and cap out-of-pocket costs at $2,000; lower health care premiums for millions of Americans; and make the biggest corporations pay their fair share. There are no new taxes on families making $400,000 or less and no new taxes on small businesses. The IRA closes tax loopholes and enforces the tax code.
Republicans are trying to paint the increase in IRS employees as an attack on the American people. They don’t point out that staffing at the IRS has gone from over 80,000 in 2000 to 35,000 today, while tax filings and complexities have increased. Audits of millionaires have dropped 71% since 2010. Working Americans have their taxes taken out of their paychecks – they don’t have the option of tax loopholes that high-end earners do. The only people who should be concerned about having an IRS with enough employees to enforce the law and to catch tax scofflaws are those who have been fudging their taxes. I don’t have a tax shelter for my Social Security check.
The IRA was passed along party lines – no Republicans voted for it – and since it became law Republicans have been taking pot shots at it, trying to paint it as bad for the economy and American seniors and workers. In fact, the opposite is true.
Republicans are now on record as having voted against taking serious action to mitigate the worst impacts of a warming planet – against the wishes of a strong majority of Americans. They have voted against increasing American competitiveness with China in renewable energy technology and enhancing our national security. They have voted against reducing home energy costs for Americans. They have voted against reducing drug costs for seniors. They have voted against ensuring that large corporations and the ultra-wealthy pay their fair share of taxes. It will be interesting to see how the American people view this radical stance in the November midterms.
Chas Macquarie is a Carson City resident.