How the Cut Inflation Act will help small businesses – archyde
By signing the Cut Inflation Act, President Biden is delivering on his promise to build an economy that works for working families and small businesses. The Cut Inflation Act provides urgent investments to reduce prescription drug costs, health care costs and energy costs to create opportunities for America’s 33 million innovative small businesses and startups. This is our most aggressive action yet to tackle the climate crisis. This will help the Fed fight inflation by reducing the deficit. The super-rich and big corporations are being asked to pay their fair share, and no small business or household earning less than $400,000 a year pays a penny more in taxes.
President Biden and congressional Democrats have pushed back against special interests to pass this landmark legislation for American families and small businesses, and grow the economy from the bottom up and the middle.
Reduced costs for small businesses
The Cut Inflation Act will reduce costs for small businesses by keeping health care costs low, supporting energy efficiency investments and building supply chain resilience.
Small businesses save essential support for health care costs. The Cut Inflation Act would preserve premium tax credit support from the U.S. bailout by extending Affordable Care Act (ACA) plans through 2025. According to a recent analysis of tax data of 2021 released by the Department of Health and Human Services, the ACA Marketplace is an important source of coverage for 2.6 million small business owners and self-employed adults. Additionally, small business owners and self-employed people make up 25% of Marketplace listings among working-age adults. Since the implementation of the ACA, the uninsured rate for the self-employed has dropped dramatically, from 30% in 2013 to 20.5% in 2019, resulting in a decrease of 1.3 million unemployed independent adults. Overall, about 13 million Americans would save an average of about $800 a year on their health insurance premiums compared to what they would have paid without the Inflation Reduction Act. This investment will encourage new business start-ups and job creation, as entrepreneurs can start a business without risking being uninsured.
Reduce energy costs for small businesses. The Cut Inflation Act includes several provisions that will save small business owners money on energy costs:
Small businesses can benefit from a tax credit that covers 30% of the cost of switching to low-cost solar power, reducing operating costs and protecting small businesses from price volatility. energy that currently afflicts them. Small business owners can receive a tax credit of up to $5 per square foot to support energy efficiency improvements to pay lower utility bills. Small businesses that use large vehicles such as trucks and vans will benefit from a tax credit covering 30% of the cost of purchasing clean commercial vehicles. Vehicles, such as electric and fuel cell models.
By saving on energy costs, small businesses will also help tackle the climate crisis. The increased frequency and scale of natural disasters put more small businesses and communities at risk of destruction and disruption. The historic action of the Reducing Inflation Act on climate change will ensure economic stability and the growth of major highways across the country.
Deficit reduction to fight inflation. The Inflation Reduction Act is more than entirely self-financing and will lead to deficit reduction over the next decade. It would build on the significant debt reduction that took place under the Biden-Harris administration. The administration is expected to achieve more than $1.5 trillion in deficit reduction this year, after reducing the deficit by more than $350 billion last year. This would be the largest one-year decline in our country’s history, and the deficit would be lower than that projected by the Congressional Budget Office before the passage of the US bailout. And many leading economists and commentators have argued that, based on the deficit reduction we’ve achieved to date under President Biden, plus hundreds of billions of dollars more in deficit reduction, the law on reducing inflation will help reduce inflationary pressures. When small businesses operate with greater price stability on gas costs to wages, it will be easier for entrepreneurs to plan and grow their businesses.
Reduced prescription drug costs for seniors. Many small businesses are owned by older people. Americans pay 2-3 times more for their prescription drugs than people in other wealthy countries. High prices contribute to racial and ethnic health disparities. The Cut Inflation Act would help close the drug access gap by improving prescription drug coverage and lowering drug prices in Medicare. Law:
Seniors pay about $2,000 a year for prescription drugs they buy at the pharmacy. Caps seniors paying $35 for a month’s supply of insulin. Medicare provides access to several additional free vaccines for beneficiaries, including the shingles vaccine. It would further reduce prescription drug costs for seniors by allowing Medicare to negotiate higher drug prices and forcing drugmakers to rebate Medicare when they raise prices faster than inflation. .
Developing economic opportunities for small businesses
The Cut Inflation Act will help small businesses grow and create well-paying jobs in communities across America.
Double the research and development (R&D) tax credit for small businesses. Pre-revenue startups create jobs and support economic growth through research, discovery and innovation. However, they were not able to benefit from the R&D tax credit to the same extent as large companies. The bill levels the playing field and would increase the refundable research and development tax credit for small businesses from $250,000 to $500,000 to encourage their high-impact R&D. Starting in 2023, small businesses can use the credit to further reduce payroll taxes and other business expenses by up to $500,000 a year so they can do what they do best: innovate and market to solve global problems and create jobs to drive our economy forward.
Increase US manufacturing and competitiveness. The legislation opens opportunities for small businesses and boosts the American supply chain to invest in American workers and industry in technologies such as solar, wind, carbon capture and clean hydrogen, at a when countries around the world are vying to lead the clean energy economy. . . The legislation includes tax incentives to develop US-sourced materials such as batteries, solar and wind components, and technologies such as carbon capture systems and electrolyzers to produce hydrogen. The law also includes key requirements for domestic procurement – for example, for the use of domestic steel in wind projects – and around existing wages and apprenticeships to ensure we can create well-paying jobs.
Supporting Local Clean Energy Economies: The Act creates a new Clean Energy and Sustainability Accelerator, which will create national and local clean energy financing institutions, supporting the deployment of distributed zero-emissions technologies such as heat pumps, community solar power and electric vehicle charging. This accelerator will expand entrepreneurial opportunities in clean energy while prioritizing more than 50% of its investments in underserved communities.
Develop rural opportunities. The law significantly expands the Rural Energy for America program, which supports small rural businesses and agricultural producers through clean energy and energy efficiency improvements. The US Department of Agriculture estimates the expansion will reach more than 41,500 small businesses and farms. The act provides more than $9 billion to support rural electric cooperatives, which help more than 21 million businesses, homes and farms increase their resilience, reliability and affordability through clean energy projects.
Leveling the playing field by reforming the tax code
President Trump and congressional Republicans’ tax bill of 2017 only made an unfair tax system worse. The Cut Inflation Act of 2022 is an important step in making our tax code fairer. It will increase revenue by:
Make sure the super-rich and big corporations pay the taxes they already owe. Tackle large, profitable corporations with annual profits of over $1 billion that currently get away with paying very little federal income tax. A 1% surcharge is levied. Corporate share buybacks that will incentivize companies to invest.
Small businesses and working families will have better access to the benefits they are entitled to under the tax code through the law’s transformative investment in the Internal Revenue Service and can get their questions answered quickly and efficiently. . Treasury Secretary Janet Yellen ordered the Internal Revenue Service not to use any of the additional funds provided by the bill to increase the share of small businesses or households below the $400,000 threshold that is audited against historical levels. This would help ensure that no household or small business earning less than $400,000 per year would see their taxes increased by 1%.
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