Here’s what the Inflation Reduction Act means for North Carolina

WASHINGTON, D.C. (WGHP) – What some are calling the country’s most significant legislation to attack the rapidly heating climate passed the U.S. House today and is headed for President Joe Biden’s ceremonial signature.

You will hear from Republicans – who uniformly in the Senate and House opposed the Inflation Reduction Act – that this bill is about raising taxes and hiring predatory IRS agents, but you can be sure its biggest focus is to provide programs to expand your opportunity to protect the planet.

The bill invests some $369 billion in measures designed to protect the planet and to put the U.S. on a path to 40% emissions reduction by the end of this decade. Proponents say that’s the most significant progress the U.S. has made in years of false starts.

Lest you think that’s not a priority, you should note the polar ice cap is melting at its fastest rate in 5,500 years and we just endured a July that was the third-hottest ever but also had the warmest evening temperatures ever, meaning our lows were higher.

You will get help in doing your part to fight the fossil fuel emissions that exacerbate the conditions that cause the rising heat and oceans through tax credits designed to reduce significantly the cost of electric vehicles made in the U.S., solar panels, home appliances and clean fuel.

But the bill has several elements that address not only the climate but also reducing the cost of health care – including prescription drug costs – and growing revenue. It is forecast to reduce the federal deficit by $305 billion through savings and revenue enhancements.

“Today, I was proud to vote for the Inflation Reduction Act which will help Sixth District residents by lowering the cost of health care and prescription drug prices, reducing energy costs, investing in domestic manufacturing while also addressing the country’s deficit,” U.S. Rep. Kathy Manning (D-Greensboro) said in a statement released by her staff. “This historic legislation will help North Carolinians access more affordable health care and save money, including on American-made electric vehicles and energy-efficient household appliances. It will also create incentives for investment in clean energy projects and manufacturing and create a strong foundation for economic growth across the country.”

All five Democrats representing North Carolina in the House voted for the bill, and all eight Republicans voted against it, as did Republican Senators Thom Tillis and Richard Burr.

It’s the $468 billion in revenue growth that causes the pushback by the GOP because the bill sets a minimum corporate tax rate (15%), eliminates some high-end deductions and expands the number of IRS agents by 87,000 to ensure taxes are being paid. They also argue it is about spending and not addressing inflation, despite its name.

GOP opposition

Rep. Ted Budd (R-Advance) of the 13th Congressional District, the GOP nominee for the U.S. Senate this November, filed an amendment to switch all the dollars spent on the IRS to immigration enforcement. He also teamed with Rep. Greg Murphy (R-Greenville) on an amendment to ensure that the funds won’t be spent on auditing anyone making less than $400,000 a year, citing that as an attack on “working families.”

Rep. Richard Hudson (R-Concord), a candidate in the 9th District that includes Randolph County, said he would vote no because the bill would increase inflation and raise taxes.

“This bill would raise taxes, throw money at woke climate and social programs that won’t work — including over $350 billion for ‘Green New Deal’ initiatives — and make the inflation crisis worse,” Hudson said in a statement.

“On top of this, they plan to hire 87,000 new IRS agents to come after you. That’s more than all the troops stationed at Fort Bragg, America’s largest military base. You couldn’t even fit all the IRS agents in the Carolina Panthers stadium!”

Budd’s opponent in the Senate race, former NC Supreme Court Chief Justice Cheri Beasley, immediately released a statement: “Congressman Budd should have to explain to every North Carolinian who has been forced to split pills or skip doses why he has once again turned his back on them with his vote against lowering costs. This latest vote against common sense action to lower costs and help working families is a reminder that at his core, Congressman Budd is a consummate Washington politician only interested in helping millionaires like himself and the corporations who fund his campaigns get richer.” 

The bill and North Carolinians

In its release, Manning’s office touted how the bill extends the Affordable Care Act subsidies for three years and locks in lower premiums. The release said it would “save an average middle-class family of four in North Carolina $9,137 on their yearly premiums.”

But to get a simple understanding of the bill and its effects on North Carolina and the Triad, WGHP reached out to Manning’s office with specific questions. This is what we learned:

Will the tax credits for energy investment/technology benefit specifically the Toyota Battery Plant or event Boom Supersonic (because it’s supposed to be a carbon-neutral facility)?

The Inflation Reduction Act includes an expanded electric vehicle tax credit, which provides up to $7,500 to individuals for purchases of qualifying electric vehicles, including domestic battery minerals and manufacturing requirements which specify that 50% of the battery must be manufactured or assembled in North America to qualify for the full credit, and which steadily increases to a 100% requirement by 2029. These would significantly benefit Toyota’s EV battery plant at the Greensboro-Randolph Megasite, as well as VinFast’s planned NC EV production plant.

Will the solar energy incentive make it easier for entities to install solar panels, unlike the church that lost that ability in court?

The Inflation Reduction Act of 2022 does allow nonprofits, including religiously affiliated institutions, to transfer energy tax credits to for-profits, making it more affordable to upgrade the energy efficiency of their buildings. This provision has been hailed by religious groups such as the Orthodox Union.

Any idea how our state might benefit from the “green bank” of $27 billion?

The bill would allow North Carolina to access our share of $27 billion in the bill to help states, local governments, tribes, and non-profits leverage private investments in clean-energy projects, with a focus on low-income and disadvantaged communities. This will also significantly benefit our private sector, as North Carolina is a leader in clean energy and renewable power sector.

What are you hearing from business owners about the minimum tax?

Sixth Congressional District businesses will benefit from the Inflation Reduction Act and from lower costs overall, and working families and small businesses will not be adversely affected. The bill does eliminate tax loopholes used by some large corporations with $1 billion in profits.  

Any idea how the cost-saving on drugs might broadly affect North Carolina? Do you have a dollar figure for savings for state residents?

The response included a document (below) that outlines the various aspects of the health care savings for individuals that are outlined in the bill, such as prescription drug prices and insulin caps for Medicare patients (the GOP in the Senate blocked that feature for everyone). “That is why the AARP strongly supports the bill,” the response said.