Patrick Driessen, “Were Green Tax Credits Doomed From the Start?” (Tax Notes, June 1, 2026):
When the energy consumption and business tax benefits (referred to here as green tax credits) were enacted in the Inflation Reduction Act (P.L. 117-169),1 the historical persistence of tax expenditures suggested that these provisions would survive almost any election cycle. The combination of tax relief, economic stimulus, and reduction in global environmental risk seemed likely to draw the business and consumer support needed to avoid not just repeal but also expiration.
Yet many green credits enacted in 2022 were repealed or curbed (hereafter shortened to “repealed”) in 2025 in the One Big Beautiful Bill Act (P.L. 119-21).
The OBBBA was a one-party-enacted law that reversed part (the green credits) of another one-party-enacted law (the IRA). Both laws were driven by the prerogatives, constraints, and politics of the reconciliation process. It’s unusual for policymakers to almost completely wipe out temporary (even if temporary for more than a decade, which was the case for some green credits) business- and consumer-related benefits for investment that met eligibility requirements set by a prior law (even a reconciliation-produced law). Often, those credits are extended, or if not extended, policymakers routinely let the provisions expire without repealing what was promised within the scope of the prior law.
This article isn’t about the politics of green credits (although some mention can’t be avoided) as much as it is about the economic presentation of the credits. Distributional and macroeconomic aspects of that presentation in official 2022 and other analyses seemed to contribute to the credits’ demise.
