Subsidies vs. Tax Deductions: What IRA Defenders Get Wrong

Subsidies vs. Tax Deductions: What IRA Defenders Get Wrong

The Inflation Reduction Act of 2022 (IRA), President Biden’s signature climate bill, passed solely by Democrats, contains lucrative, essentially uncapped subsidies for wind and solar-generated power. Under current law, the tax credits phase out over four years, starting in either 2032 or when the U.S. power sector’s greenhouse gas emissions fall to a quarter of their 2022 levels — whichever comes later. An essentially uncapped phase-out defies t…