Small businesses across the U.S. have faced uncertain economic conditions since the COVID-19 pandemic began in March 2020. A recent study shows that the number of active small business owners dropped by 22% in 2020. Though entrepreneurs kept adapting and business formation remained strong, a majority of existing small business operations experienced challenges. Today, small business owners still feel the pressure as they report revenues have only reached 75% of pre-pandemic levels. Established small businesses were hit hard, and people starting their own microbusinesses had to plan carefully. In response, the Biden-Harris Administration championed the American Rescue Plan as a lifeline for the small business community. Now, the Biden-Harris Administration has passed another sweeping bill to give small business owners needed support into the new year, the Inflation Reduction Act (IRA).
Many used the last two years’ economic challenges as an opportunity to innovate and expand business operations. By going digital, online sales have increased by 43%. But expansion like this can come at a price: business leaders are scrambling to hire more people to keep up with online demand. The IRA ensures that America’s small businesses can continue recovering until operations have fully rebounded to pre-pandemic levels.
The IRA, signed into law by President Biden in August, contains roughly $700 billion supporting workers’ rights, climate action, and health care access. It also strengthens American manufacturing, creating jobs for American workers and prioritizing domestic sourcing. It establishes a $35 cap for an individual’s monthly insulin supply for Medicare recipients. The IRA also offers tax incentives to individuals and companies who power their operations with clean energy.
The IRA levels the playing field for the American middle class, domestic industries, and our small business economy by holding wealthy households and corporations accountable. The package’s clean energy and electric vehicle tax credits will save American households more than $1,000 per year; and by moving the economy toward our climate goals, it will save families nearly $500 per year on energy bills. Families will have more to spend and businesses will continue to safely — and sustainably — reopen, which means consumers can continue supporting local businesses as they regain financial security.
Our global counterparts are leading the way when it comes to sustainable energy sources, and our time to match their climate efforts is running out. The IRA’s critical climate and clean energy investments will create long-term growth in America’s energy economy and millions of good-paying jobs, where we need them most. Within the next ten years, carbon emission rates could decrease by 40%. The IRA will help us tackle supply chain issues caused by unpredictable weather patterns, which disrupt operations for small businesses that lack the resources to rebuild after severe weather.
To learn more about the Biden-Harris Administration’s Inflation Reduction Act, check out the White House fact sheet here.
More from Business Forward:
- Briefing: White House Officials on the Inflation Reduction Act
- The Inflation Reduction Act Doesn’t Raise Your Taxes: It Just Makes It Harder for the Wealthiest Americans to Cheat
- Statement from Liz Fairchild on the Inflation Reduction Act
- Corporate Leaders Call on Congress to Promptly Pass the Inflation Reduction Act of 2022