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How much money can you save with the Inflation Reduction Act?

Analysis from a non-profit group puts savings in the hundreds if Democrat legislation aimed at tackling inflation is passed.

Update:
Analysis from a non-profit group puts savings in the hundreds if Democrat legislation aimed at tackling inflation is passed.
CHRIS WATTIEREUTERS

The new Inflation Reduction Act is looking like it could be of great benefit to American hosueholds if newly released research is to be believed. A report by non-profit group Rewiring America found that the tax breaks included in the proposed legislation could lead to around $1,800 of savings by the average household.

“It is a market-tilting level of investment,” Ari Matusiak, the group’s co-founder and CEO told Yahoo Finance, “The beneficiaries of [this measure] in the long term are going to be all of us on the planet. In the short term, it’s going to be Americans at their kitchen tables realizing savings on a month-to-month basis.”

Some of the savings come from rebates for families to install more efficient appliances in their home. Credits will also be given to those looking to make the switch to electric vehicles.

“41 percent of the inflation that consumers are experiencing are because their energy bills directly are going up at the pump and at their kitchen table,” Matusiak said. “And electrifying the machines that we use in our day-to-day lives structures that inflation out of our lives forever.”

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However, these findings were found by the group that was involved in crafting the bill, meaning the results may be a little too positive. The jury is out on whether it will contribute to reducing inflation quickly as many of the measures are aimed at long-term benefits, though the focus on protecting against global warming is a bonus.

What else is included in the Inflation Reduction Act?

The new legislation intends to tackle inflation from different angles by reducing costs on healthcare and energy while also reducing the deficit.

The bill would allow Medicare to negotiate drug prices, something currently banned by previous legislation, and cap out-of-pocket costs to $2,000. It would also lower premiums on Affordable Care Act coverage for millions of Americans.

In order to lower energy costs by investing in cleaner domestic energy production and weatherisation to make buildings more energy efficient. It will also help meet long-term US commitments by reducing carbon emissions 40 percent by 2030.

There will be no new taxes on families making $400,000 or less, nor will there be any new taxes on small businesses.

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