How the Tax Bill Will Destroy Clean Energy & Manufacturing Jobs
By Joanna Ain & Harley Stokes
The benefits of the Inflation Reduction Act are vast. But that progress is now under threat. The Inflation Reduction Act is projected to create more than 9 million jobs over the next decade, but Republicans are considering repealing it in order to pay for more billionaire tax cuts. By repealing Inflation Reduction Act tax credits, Republicans risk those jobs—many of which are in Republican-held districts. Indeed, we’re already seeing project cancelations due to the uncertain future of the law. Â
The Inflation Reduction Act was passed to ensure that all Americans—especially those in low-income, deindustrialized, or systemically-marginalized communities—would benefit directly from its investments first hand. Roughly two-thirds of the jobs created by the Inflation Reduction Act are in construction and manufacturing—many being good-paying jobs that you don’t need a college degree to get. The impact of this funding has touched every corner of our nation. Any of the communities getting Inflation Reduction Act support bear the brunt of increasingly frequent natural disasters and are most in need of climate change mitigation. Low-wealth communities that desperately needed investment, are now threatened with funding cuts through the Republican’s tax plan.
The majority of Americans are not fooled. Four out out of five believe that the Republican party is looking out for billionaires and large corporations, not working Americans. While some hold out hope that the Trump tax cuts will help job growth, the costs of this bill are simply too high. The nonpartisan Yale Budget Lab found that the tax bill would increase employment by just 100,000 at a cost of $5 trillion. That is a cost of more than $50 million per job.Â
The Republican budget would hand out nearly $5 trillion in tax cuts, most of which go to the richest 5%. To pay for those tax breaks for the wealthy, their plan calls for cutting more than a trillion dollars in funding from programs essential to working Americans and slashing programs creating good-paying, clean energy jobs.Â
Since the Inflation Reduction Act was signed into law, manufacturers and developers have enjoyed the market certainty they need to break ground on billions of dollars’ worth of new or expanded manufacturing facilities, energy projects, and more. Losing the tax credits and investments in the Inflation Reduction Act would mean ceding clean energy manufacturing to other countries.
These investments are creating and maintaining jobs for working Americans, lowering energy costs, restoring American manufacturing to greatness, and supporting the nation’s tradition of leadership in innovation. We owe it to our communities to keep what’s working. In this era of uncertainty, we have to protect the climate progress we have made and will continue to make and keep investing in the people who need it most, not billionaires.
Republicans continue working to pass a billionaire-first tax plan through the reconciliation process which will increase costs for everyday Americans while giving trillions in handouts to the ultra-wealthy. Especially alarming is that this bill threatens to take away federal investments and tax credits—and the private investment they attract— in clean energy projects and manufacturing around our country that bolster communities and create good-paying jobs. These tax credits and federal investments—a key part of the 2022 Inflation Reduction Act— drive private investment and job creation. The Inflation Reduction Act has brought hundreds of billions of dollars in investment to our nation, is helping to lower and stabilize wholesale electricity prices, and saving taxpayer dollars by investing in schools and other public buildings.Â
Just one example of how the Inflation Reduction Act is creating jobs and saving taxpayers money is the availability of clean energy tax credits to tax-exempt entities, like schools, non-profit hospitals and municipal buildings. Through the use of direct pay—also called elective pay—schools across the country have been able to offset some of the costs of energy projects through the use of tax credits never before available to them. This makes schools more resilient, creates jobs in local communities, and reduces energy costs.
ABOUT THE AUTHORS
Joanna Ain is the Policy Director at Families Over Billionaires.
Harley Stokes is the Senior Federal Policy Manager at BlueGreen Alliance.
