In a move that is sure to please businesses and consumers alike, the Inflation Reduction Act was passed by the House of Representatives earlier this month in an effort to help boost the economy. The Act aims to reduce the effects of inflation by providing credits, grants, and loans to businesses and individuals.
The Act will result in a reduction in the cost of living for Americans, as well as an increase in wages and job opportunities. In addition, small businesses will benefit from the Act’s provisions to reduce the cost of goods and services, while working families will see their purchasing power increase.
This Act will help make it easier for businesses to get loans by increasing the amount of credit they can get. This will help to stimulate the economy and create jobs. The Act will also provide grants to businesses willing to create new jobs.
“Lower costs mean small business owners and entrepreneurs can focus on doing what they do best, creating jobs, developing talent, innovating, and opening doors of growth and opportunity across all of our communities.”
- $837.5 million in loans and grants to improve the energy efficiency, water efficiency, or climate resilience of affordable housing.
- $291 million in grants to entities that carry out projects that produce sustainable aviation fuel, develop low-emission aviation technologies or demonstrate these technologies. The government grants will be 75% of the total proposed cost of the project, or 90% if it’s a small-hub airport or non-hub airport. These projects must take place in the United States.
- $3 billion in direct loans to help companies expand or establish manufacturing facilities in the U.S. to produce low or zero-emission vehicles.
- $250 million in grants and loans to improve land access for farmers, ranchers, and forest landowners. The money will be used to fractionate land issues and improve access to land for farming and ranching.
- $5 billion in loans to help energy infrastructure operators retool, repurpose, or replace infrastructure that has ceased operations or to enable operating infrastructure to avoid or reduce greenhouse gas emissions.
- $2 billion in grants for the domestic production of hybrid and electric vehicles and hydrogen fuel cell vehicles. This would incentivize automakers to produce these types of cars, which would help reduce emissions and reliance on oil.
- The Inflation Reduction Act also includes a tax credit for qualifying electric vehicles of up to $7,500 for vehicles weighing less than 14,000 pounds and up to $40,000 for cars that weigh more than that. The credit is expected to last until the end of 2032.
The SBA believes these changes will positively impact small businesses as they will help reduce the overall cost of living and business in the United States. In particular, the SBA Administrator believes that the Inflation Reduction Act will help make it easier for small businesses to access capital and expand and create new jobs.
“This law not only tackles inflation and powers America’s transition to safer, cleaner energy, it also shrinks the budget deficit and—most importantly—drives down health care and energy costs for small businesses and their employees. Lower costs mean small business owners and entrepreneurs can focus on doing what they do best, creating jobs, developing talent, innovating, and opening doors of growth and opportunity across all of our communities—including selling more American-made goods and services to the world’s largest buyer: the U.S. Government.” Isabel Guzman, Administrator for the SBA said.
Along with these incentives, there are some provisions in inflation, taxes, and healthcare:
- A 15% minimum tax on corporations with over $1 billion in revenue and a 1% excise tax on corporate share buybacks.
- The Affordable Care Act will be extended through 2025, and Medicare will be allowed to negotiate drug prices starting with ten drugs in 2026. Medicare recipients will have a cap on their drug expenditures at $2,000 per year.
For small businesses, this would mean larger corporations will start paying their fair share, and companies may be able to afford better healthcare for their employees.
The Inflation Reduction Act is a welcome relief for many Americans who have been struggling to make ends meet in recent years. The Act’s provisions will help ease the financial burden on small businesses and working families and ultimately benefit the economy as a whole.
Overall, the Inflation Reduction Act is a good-size win for most small businesses. Some businesses will benefit more than others, but overall it is an exciting piece of legislation.
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