President Biden on August 16 signed into law the Inflation Reduction Act of 2022 (H.R. 5376), salvaging key parts of Democrats’ domestic agenda after months of negotiations marred by political infighting and key democratic holdouts.
For an executive summary of the Act, see here.
“President Biden and Congressional Democrats have worked together to deliver a historic legislative achievement that defeats special interests, delivers for American families, and grows the economy from the bottom up and middle out,” the White House said in a statement earlier. The White House is also planning an event on September 6 to celebrate the bill’s enactment.
The $740 billion Act raises revenue through a new 15% minimum tax on large, profitable corporations and a 1% excise tax on stock buybacks, as Democrats were intent on using the budget reconciliation measure to reduce the U.S. deficit by about $300 billion.
Other revenue would come from stricter enforcement of tax compliance by the IRS. Enforcement-related funds, at $45.6 billion, make up more than half of the total $80 billion in additional appropriations. The IRS has said its goal is to reduce the tax gap by strengthening its ability to capture revenue from taxes that might otherwise not be collected.
The social spending package would also extend for three years the American Rescue Plan Act’s expanded subsidies for coverage purchased through the Health Insurance Marketplaces; allow Medicare to negotiate prices for insulin and certain other drugs; implement tax changes and spending subsidies to address climate change.
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