Tax Code Embeds Green Transition: White House Economist

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White House Council of Economic Advisers Chair Lael Brainard stated that the sustainable energy provisions of the 2022 Inflation Reduction Act (IRA) would be difficult for Republicans to reverse, even if they win majorities in the general election. The IRA includes tax credits and deductions for clean energy that incentivize households and businesses to change their behaviors. Despite Republican opposition to the IRA, some Republicans have praised the investments made in local economies due to the Act.


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Lael Brainard, Chair of the White House Council of Economic Advisers, has stated that reversing the sustainable energy provisions of the 2022 Inflation Reduction Act (IRA) will not be a simple task for Republicans, even if they secure a majority in the upcoming general election.

Brainard argues that the energy transition, which was embedded in the tax code through the IRA, is shielded from abrupt policy amendments that may be sought by a new Congress or presidential administration. This is due to the complex nature and lengthy amendment process of the tax rules. The IRA promotes changes in households’ and businesses’ behaviors by offering incentives, thereby eliminating the need for forceful spending initiatives.

“This is now the tax code. These rules are intricate and require a significant amount of time to write and amend,” stated Brainard during a Washington-based event.

The IRA is packed with clean energy tax credits and deductions that are being enforced by the IRS. These include credits for households that cover 30% of the cost of solar electricity products, wind turbines, fuel cells, and battery storage units until 2032. Similar credits are also accessible for energy efficiency upgrades such as windows, external doors, insulation materials, and home electric vehicle chargers.

Similarly, businesses can avail credits for clean manufacturing investments and production, electric vehicles, biodiesel, nuclear power production, carbon sequestration, and several other technologies. Manufacturing investments, which were already increasing prior to the IRA’s approval, soared immediately after, reaching over $220 billion in March on a seasonally adjusted basis, after fluctuating around the $80-billion mark between 2015 and 2021.

Despite the strong opposition from Republicans to the IRA, many Republicans have publicly appreciated the investments facilitated by the act in local and regional economies. One such example is Rep. Andy Biggs (R-Ariz.) who lauded the construction of a battery plant in Queen Creek, Arizona, encouraged by the IRA. “Queen Creek is set to become the new home for a high-tech battery manufacturing facility… This will aid in unleashing American energy,” wrote Biggs on social media.

Rep. Mark Green (R-Tenn.) also praised an electric vehicle battery plant expansion in Cumberland City, Tennessee, another project highlighted by the Treasury as being bolstered by the IRA. “Honored to join [the Tennessee Department of Economic and Community Development] in welcoming Daejin Advanced Materials… This $10 million expansion will create 83 new jobs in [Tennessee’s 7th district]. Welcome, Daejin!”


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