Trump Wants To Kill the Inflation Reduction Act, But Should He?

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President Donald Trump has made it clear: he wants to repeal the Inflation Reduction Act (IRA). Signed into law by then-President Joe Biden in 2022, the IRA was positioned as a landmark bill for climate, healthcare, and tax reform. President Trump considers it a bloated spending package disguised as inflation relief and wants it gone. This decision could trigger ripple effects across sectors, including disrupting manufacturing, raising energy costs, and redirecting investment.

The Inflation Reduction Act delivers more than $370 billion in clean energy incentives, aims to lower prescription drug prices through Medicare negotiations, and introduces corporate tax reforms. Repealing it would eliminate subsidies for electric vehicles, renewable energy projects, and green infrastructure. For many red states, these projects are already underway and would be devastating to lose.

Why Trump Wants to Repeal the IRA

President Trump calls the Inflation Reduction Act an expensive green agenda that fails to deliver meaningful inflation relief. He believes it fuels government overreach, burdens corporations with higher taxes, and undermines U.S. energy independence by pushing renewables over fossil fuels.

The 15% corporate minimum tax and the 1% stock buyback tax introduced under the IRA clash directly with Trump's economic philosophy. These provisions are seen as business deterrents. President Trump also objects to Medicare's ability to negotiate drug prices, which he argues opens the door to federal price controls. Beyond economics, Trump's drive to dismantle the IRA reflects his broader mission to undo Biden’s legacy piece by piece.

Why Repealing the Inflation Reduction Act Is a Good Idea

From a conservative economic standpoint, repealing the Inflation Reduction Act could restore tax cuts and reduce federal overreach. The Tax Foundation estimates a full repeal could raise $850 billion over the next decade by cutting green energy tax credits alone. That money could fund an extension of the 2017 Trump tax cuts, which many Republicans argue spurred economic growth.

Critics of the IRA also highlight inefficiencies and unintended market consequences. Many clean energy credits support purchases that likely would have happened anyway. Additionally, the IRA’s complex regulatory structure may give unfair advantages to firms with better legal teams or political connections, rather than the most efficient or innovative players. Many clean energy credits go to buyers who would have purchased electric vehicles or upgraded their homes regardless. Others argue the IRA’s regulatory maze favors politically connected firms over truly competitive ones. Rolling back these incentives could, in theory, foster a freer and more efficient market.

Why Repealing the Inflation Reduction Act Is a Bad Idea

The economic fallout of a full repeal could be severe. Energy Innovation estimates that killing the IRA would cut $160 billion from U.S. GDP and eliminate nearly 790,000 jobs by 2030. Household energy bills would rise by $32 billion between 2025 and 2035.

Ironically, Republican-led states stand to lose the most. Texas, Georgia, and Florida have seen a surge in private investment thanks to the IRA’s clean energy incentives. Repealing the law could kill those projects and push investment overseas. Energy costs would also spike, especially if renewables lose ground to fossil fuels.

So far, the IRA has drawn $600 billion in private investments across 750 projects nationwide. Many of these are already generating jobs, salaries, and tax revenue. Repealing the act midstream could scare investors and shrink future economic growth.

The Case for the Middle Ground

Even House Speaker Mike Johnson admits that a full repeal might be too blunt. His proposal: apply a scalpel, not a sledgehammer. Target underperforming credits, like electric vehicle subsidies or high-cost residential upgrades, while preserving credits that drive efficiency and real emissions reductions.

Thoughtful reform could reduce spending while retaining the IRA’s high-impact provisions that support energy competitiveness and innovation. Some suggest removing prevailing wage rules that complicate clean energy credits or streamlining overlapping incentives. This approach keeps the momentum of clean energy while addressing conservative concerns about spending and federal control.

The Inflation Reduction Act represents a turning point for U.S. economic strategy, not just climate policy. Investors must now weigh short-term tax relief against long-term stability and market expansion. Depending on one’s position in the economic chain, the IRA has created winners and losers. President Trump's plan would mark a sharp departure from Biden-era industrial policy, returning to a more traditional, market-oriented approach. The question is: will the markets and Main Street benefit or suffer?

Do you agree with Trump's plan to repeal the Inflation Reduction Act? Tell us what you think!

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