On Aug 7, the Senate passed the Inflation Reduction Act, a new bill that represents the largest investment in U.S. history in fighting climate change, lowering the cost of some prescription drugs, and raising taxes on corporations. With a tiebreaking vote from Vice President Harris, the 50-50 Senate sent the bill to the House, which aims to approve it and send it to the White House for Biden’s signature later this week.
The bill includes the largest injection of US public funds into the fight against climate change through $369bn in clean energy incentives while allowing the government to negotiate lower prescription drug prices both longstanding Democratic priorities. It also includes measures that will increase the tax bill on large corporations, such as a 15 percent minimum tax on their profits and a 1 percent tax on share buybacks.
Here are the main provisions:
Creation of a 15% corporate minimum tax rate: Corporations with at least $1 billion in income will have a minimum tax rate of 15%.
Energy security and climate change investments: The bill includes numerous investments in climate protection, including tax credits for households to offset energy costs, investments in clean energy production, and tax credits aimed at reducing carbon emissions.
IRS tax enforcement: The bill invests $80 billion in the nation’s tax agency over the next 10 years.
Prescription drug price reform: will allow Medicare to negotiate the price of certain prescription drugs.