Senate To Consider New Climate, Health Bill That Would Raise Taxes

On July 27, Sen. Joe Manchin (D-W.Va.) and Senate Majority Leader Chuck Schumer (D-N.Y.) announced an agreement on a $670 billion health care and climate package that, if approved by both chambers of Congress, would raise taxes, extend Affordable Care Act insurance subsidies, and help to substantially reduce U.S. carbon emissions by 2030.

The new budget reconciliation package, dubbed the Inflation Reduction Act of 2022 would:

• Require offshore oil and gas lease sales in federal waters;
• Provide funding for electric vehicle credits and clean energy technology incentives;
• Create tax credits for consumers who add renewable energy items to their homes;
• Establish a new fee on methane emissions;
• Incentivize the increased domestic production of critical minerals used in batteries for electric vehicles; and
• Provide $300 billion over 10 years for deficit reduction.

According to a summary of the legislation available here, he Inflation Reduction Act of 2022 would be paid for through the creation of a 15 percent corporate minimum tax that reportedly would raise $313 billion over 10 years, reform to Medicare prescription drug pricing, boosting the IRS enforcement budget by $124 billion, and closing the so-called “carried interest loophole.”

The business community opposes these tax increases, which will do nothing to calm inflation. In fact, an analysis from the University of Pennsylvania suggests the legislation might even increase inflation slightly in the very near term.

In a statement, President Joe Biden praised the deal, however, saying, “We will pay for all of this by requiring big corporations to pay their fair share of taxes, with no tax increases at all for families making under $400,000 a year.”

The Senate parliamentarian must review the legislation to ensure it complies with the budget reconciliation rules that would allow the legislation to pass the Senate on a simple majority vote. That action will happen over the next several days.

In the meantime, the National Association of Manufacturers has launched broadcast and cable television ads ahead of a potential vote on the bill.

The U.S. Chamber of Commerce has a generic action alert individuals can use to send a letter to their U.S. senators and representatives asking them to oppose tax increases. MSCI member company employees are encouraged to use that portal to send a message asking lawmakers not to support Inflation Reduction Act tax increases. Click here to find the alert and make its message your own.