Republicans outlined part of a series of legislative proposals that outline the administration’s far-reaching plan to support clean energy to fund the comprehensive tax cuts promised by U.S. President Donald Trump.
On Monday, members of Congress released a tax law on the powerful House Methods and Means Committee, which released a draft legislation on Monday that would end renewable energy subsidies and tax relief for purchases of electric vehicles.
The bill begins with understanding the Republican plan to reshape the U.S. tax laws, including removing some taxes on tips and overtime pay, and cementing Trump’s lower income tax rates proposed in his first semester.
“The bill offers votes for Americans to vote for President Trump’s commitment to putting America first.” “(It) ends the special interest giveaway and will hold the awakening elites and entities responsible from the tax law.”
These plans will be at the heart of a comprehensive “big bill” that Trump hopes to develop his legislative agenda through Congress and secure his legacy before next year’s midterm elections.
The legislation’s attack on the green energy tax credit – aimed at eliminating former President Joe Biden’s flagship climate legislation, the Lower Inflation Act – has sparked anger among Democrats and renewable energy bosses who say it will hammer workers.
Nevada Senator Catherine Cortez Masto said lowering the tax credit would “destroy jobs and kill innovation.”
"Switching things overnight is not something any industry can manage," said Chris Hopper, CEO of Aurora Solar. "So, in the worst case, it's certainly a huge wave of job losses and bankruptcy."
The bill will provide $7,500 tax credits to electric vehicle buyers after 2026 and a $4,000 credit for used electric vehicles starting at the end of this year. By 2031, it will reduce the tax credits for most renewable energy investment and production, rather than the emission targets that will expire.
Monday’s proposal marks the most important effort of Republicans, which has not yet been lifted for federal clean energy subsidies in the Biden-era era, which Trump calls a “green new scam” and follows plans released over the weekend to lend programs to the energy sector and grant programs to combat climate change.
The legislation would also limit the availability of tax credits to foreign entities, a move aimed at Chinese-backed solar groups.
However, the legislation provides years of restrictions to reduce some federal tax credits - Republicans who rely on subsidies provided by the IRA. The franchise has aroused sharp criticism from some hard-sponsored members of the Party.
“Whether the bill completely abolishes the IRA to prevent devastating bad projects (batteries, solar farms, etc.) in my area – no, that will make those that will lead to construction competitions (among other issues), and many we shouldn’t leave us with many problems,” Texas Congressman Chip Roy wrote on X.
The bill would also raise the cap on local taxpayers’ payments, with taxes deducted from their federal tax bills ranging from $10,000 to $30,000. This is a measure that Republicans seek in high-tax democracies such as New York and California.
"(The Act) won't satisfy everyone," said Rohit Kumar, co-leader of the PwC IRS. "But I can see how they seem to be trying to find a very narrow terrain where the Venn diagram overlaps between factions in the conference."
The draft bill will be reviewed in a review by the Roads and Means Committee on Tuesday, and then debated by a wider House of Representatives.
Republicans all hold a majority in Congress and hope to push changes through the Senate with a simple majority, rather than the 60 votes required for non-bill laws.