All Democrats in Congress supported the final product, called the Inflation Reduction Act. It was largely shaped by Mr. Manchin, Mr. Schumer and Sen. Kyrsten Sinema, D-Arizona, another centrist, who resisted many of the tax increases advocated by most of his colleagues. The package eliminated most of the spending that would have gone toward expanding the nation’s social safety net and slowed plans to undo elements of the 2017 tax law passed during the Trump administration.
But the bill will help move the Biden administration to meet its pledge to cut emissions roughly in half by 2030, even as scientists and climate activists warn that more action from Congress and Congress will be needed. executive to achieve this goal. The legislation aims to use the tax code to encourage consumers and businesses to buy and invest in electric vehicles, solar panels and other renewable energy sources such as wind or solar power, as well as the facilities needed to build more d ‘these articles at the national level.
The package includes millions of dollars in climate resilience funding for tribal governments and $4 billion to deal with droughts in western states, and introduces penalties for fossil fuel companies with excessive emissions of methane, a gas greenhouse effect.
As part of a long-running effort to expand access to health care across the country, Democrats included a three-year extension of expanded health care subsidies first passed in passed as part of the $1.9 trillion pandemic relief bill. The bill would also give seniors access to free vaccines, allow Medicare to negotiate the cost of up to 10 prescription drugs initially, starting in 2026, and cap annual out-of-pocket drug costs for Medicare recipients at $2,000. It would also cap insulin costs at $35 a month for enrollees.
To pay for the package, the measure would impose a new minimum tax of 15 percent on companies that report more than $1 billion in accounting income to their shareholders, the profits companies report to shareholders, and establish a tax on 1 percent on corporate shares. buybacks starting in 2023. The legislation would also invest $80 billion in the IRS, which Democrats say would bolster the historically underfunded agency and help fight tax evaders and wealthy corporations. This provision is estimated to raise $124 billion over a decade.
Republicans have focused much of their anger on the provision, warning that it is a harsh attack on lower- and middle-class taxpayers. In response to criticism, Treasury Secretary Janet L. Yellen instructed the agency this week to make sure there would be no increase in audit fees for small businesses or families that earn less than $400,000.