After more than a year of endless debate about costs, taxes, tax breaks and regulations, US President Joe Biden is finally able to show his “aunt smile.”
On Tuesday, August 16th, Eastern Time, Biden signed the “Inflation Reduction Act of 2022″ (Inflation Reduction Act) into effect. The bill is a “scaled-down version” of the $1.75 trillion “Rebuild a Better Future Act” that Biden pushed last year.
The bill claims to increase fiscal revenue by $740 billion, while increasing government spending by a total of $430 billion for energy, climate change and health care subsidies, of which $369 billion will be used for climate change and clean energy.
Over the next few weeks, Biden will travel across the country to lay out how the legislation will help Americans, the White House said. Biden will also host a Sept. 6 event to celebrate the enactment of the legislation. The White House said:
The historic legislation will lower energy, prescription drug and other health care costs for American households, tackle the climate crisis, reduce deficits and allow large corporations to pay their fair share of taxes.
The proposal mainly involves five aspects. The most important aspect of the market is climate investment, which focuses on clean energy manufacturing, including solar panels, wind turbines, batteries, electric vehicles and key minerals. Many manufacturing segments. The $369 billion scale also makes it the largest climate bill in U.S. history, aimed at reducing U.S. carbon emissions by 40 percent by 2030.
Not only is it large in scale, but it also lasts longer. The 30% investment tax credit available for photovoltaic projects can be extended for 10 years; the proportion of financial support for project costs is also higher, such as green hydrogen subsidies up to 50% of production costs, which will also stimulate electric The explosion of other clean energy industries such as automotive, energy storage, carbon capture and wind.
n addition to energy security and climate investments, the legislation allocates $64 billion in Affordable Care Act subsidies to cap out-of-pocket drug costs for seniors to $2,000 a year. At the same time, the legislation allocates $80 billion to strengthen IRS enforcement and ensure that high-income individuals and companies do not evade taxes. In addition, the legislation includes a 1% excise tax on share buybacks.
In addition, the White House claims the legislation will reduce the government’s budget deficit by about $300 billion over the next decade. The bill’s $437 billion spending package is expected to raise $737 billion in revenue over the next decade, with the lion’s share coming from cuts in drug prices for Medicare beneficiaries and tax increases for businesses; about $1,240 The billion dollars are expected to come from IRS enforcement, which means tougher and more frequent audits of the wealthy.
Of course, the biggest impact of the tax increase is mainly on about 150 large high-income companies, and the technology giants will undoubtedly bear the brunt. Since many large U.S. corporations currently pay low federal taxes, the bill would significantly increase their tax burden. A new repurchase tax could force such companies to abandon their share buyback plans in the short term, putting some pressure on their stock prices.
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Post time: Aug-17-2022