The Inflation Reduction Act (IRA) will lower prescription drug costs, health care costs, and energy costs. It’ll lower the deficit and no one making under $400,000 per year will pay a penny more in taxes. It’s also the most aggressive action the Biden/Harris administration has taken to confront the climate crisis.
The IRA will lower costs for families and small business by lowering health care costs. If you are a sole proprietor getting your health insurance from the Affordable Care Act marketplace or have employees who use it, your health care costs will go down. The IRA is estimated to save about 13 million Americans about $800 per year in health care costs.
The IRA will also lower prescription drug costs by capping out-of-pocket expenses on prescription drugs for people on Medicare at $2,000 per year and cap insulin for Medicare patients at $35 per month, and finally letting Medicare negotiate prices. If you are an older business owner on Medicare, these direct cost savings are for you.
And the federal Food and Drug Administration announced that millions of Americans will be able to buy hearing aids without a prescription later this fall, under a long-awaited recently finalized rule finalized.
By tackling the climate crisis, the IRA will advance environmental justice, reduce pollution and improve American energy security. It is estimated energy bills will be reduced, saving families (and small businesses) about $500 per year. IRA creates new avenues for small businesses to advance in environmental businesses — making and servicing solar panels and wind turbines, retrofitting buildings with energy efficient windows, doors and HVAC units, or entering the supply chain for new electric vehicles, whose components will need to be made in America.
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.
Additionally, small businesses can deduct up to $1 per square foot of their business for making high energy-efficiency upgrades. The per square foot deduction is boosted if the efficiency upgrades are completed by workers who are paid a prevailing wage — helping businesses save money and provide good paying jobs.
Together with his Bipartisan Infrastructure Law, the CHIPS and Science Act, and American Rescue Plan, President Biden’s economic plan is showing that we have the courage to build a future where every American has a fair shot.
Vercie Lark is the regional administrator for the U.S. Small Business Administration Region 7. To read his biography, visit www.sba.gov/about-sba/organization/sba-leadership.