It’s past time to eliminate the Inflation Reduction Act tax credits

Sometimes the stars align.

By rescinding the Biden administration’s ill-conceived energy tax credits, Congress has a chance to end a green boondoggle, lower consumer energy costs, unleash American energy dominance, and let hardworking Americans keep more of what they earn. They should take it.

A closer look at energy tax credits

Enacted under the guise of economic relief, former President Biden’s misnamed Inflation Reduction Act offered billions — an estimated $391 billion, to be exact — in energy tax credits to the administration’s favorite corporate cronies. Their friends couldn’t get in line fast enough.

The IRA’s energy tax credits are such popular handouts that the price tag is now estimated to be $1.2 trillion — three times higher than the original projections. And they could grow even more!

The tax credits are supposed to encourage clean energy use and production. Instead, they distort markets, pick winners and losers, and put upward pressure on costs.

Who is benefitting?

• Auto manufacturers can receive tax breaks for building electric vehicles
• Major producers of clean energy components like solar panels, batteries, and wind turbines
• Oil and gas companies receive tax credits for installing technology to capture and store carbon emissions

As favored industries reap the benefits of government largesse, you might be wondering what you’re getting in return for your investment.

What are you getting in return?

Would it surprise you to learn your returns include:

• sky-high inflation through increased government spending,
• A less reliable energy grid — think rolling blackouts and brownouts — and
• soaring energy costs?

It shouldn’t be surprising that the administration that ushered in a short-lived era of low-flow showerheads and tried to outlaw gas cooking stoves also thought it was a great idea to steer unlimited handouts to their green corporate cronies.

The fact is, these handouts distort the market. By artificially inflating demand for green solutions, the federal government is pushing reliable traditional energy sources out of the market, leading to higher consumer prices and less reliable service for American families.

Are there alternatives in the energy market?

Wind, solar, and other sources of green energy aren’t reliable alternatives. Their dependence on weather is a major limitation requiring utilities to maintain backup fossil fuel generation on standby at significant cost, paid by consumers.

That’s why, despite years of subsidies and mandates, green energy still hasn’t replaced traditional energy sources — not even close. In 2023, oil, natural gas, coal, and other conventional fuels accounted for 80% of American energy consumption.

Congress must act to protect American families.

As Congress seeks offsets in its reconciliation proposal, it should eliminate the IRA tax credits.

Right now, hardworking Americans are paying more at the pump, more for utilities, and more for everyday goods — all while their tax dollars are subsidizing luxury electric vehicles and foreign-made solar panels. That’s not just unfair. It’s unsustainable.

Congress has an opportunity to offer American families real relief. Eliminating the costly and ineffective energy tax credits embedded in the IRA would be a direct step toward lowering utility costs and stabilizing the energy market.

At the same time, Congress could free up fiscal space to preserve the tax cuts that helped fuel one of the strongest economic recoveries in modern history.

Make your voice heard.

The choice shouldn’t be difficult.

It’s time to repeal the Biden green energy handouts and unleash American energy dominance.