The Inflation Reduction Act of 2022 (IRA), passed by the 117th Congress and signed into law by President Biden on August 16, 2022, will have a significant impact on the African American community. We estimate the initial economic impact to be $22.322 billion over nine years, 4.5% of $490 billion in spending and tax rebates, with much of the benefit going to Black women.
Details
Increased Health Insurance: Black Americans are much less
likely to be covered by health insurance than whites.[1]
This law has the potential to address this disparity. If successful, this
provision will have the largest social and economic impact of any provision in
the law by increasing health care, life expectancy and, consequently, years
worked and income. This provision may lower the economic impact of health
issues in the Black community. We estimate the initial impact to be $6.4
billion.
Lowered Prescription Drug Pricing: We estimate the initial Medicare
prescription drug benefit to have an initial impact on Blacks of $5.130 billion,
in part because this benefit does not apply to all drug pricing.
Green energy credits for individuals will generate a $2.214
billion dollar benefit to the Black community. This is due to the impact of lending
discrimination, which leads to lower real estate ownership and decreased appliance
ownership.
Existing nuclear reactor tax credit: while Black people
don’t own any nuclear power plants, we are overrepresented in geographic areas
where these plants are located. As a quick and easy way to lower greenhouse gas
emissions, the law provides funding to help nuclear plants operate longer. We
believe this will encourage plant operators to enhance maintenance and,
therefore, safety. This may have a positive benefit on both health and real
estate values by lowering risks. Impact: $1.500 billion.
We estimate that extending existing tax credits for wind and
solar power will generate a $1.022 billion dollar benefit for the Black
community. Black ownership of residential and commercial real estate is low
relative to white ownership, so these credits will not become significant until
real estate ownership rates improve in the Black community.
August 22, 2022
[1]
: “Approximately 116 million US citizens
have high blood pressure and the majority of those affected, 91.7 million,
attempt to treat the condition with prescription medication. AARP reported that
the cost of some medication used to treat high blood pressure increased by 41
percent between 2015 and 2020. In addition, diabetes affects 34.2 million
Americans, and 15 percent of Black people, who are twice as likely to die from
the disease. The cost of insulin has tripled in the past 10 years, with one in
four of Americans dependent on insulin skipping or skimping on doses, which can
lead to death.”