You didn’t actually think we’d make it to the start of another busy season without a sweeping new piece of tax legislation, did you?
The House of Representatives on Friday passed the $740 billion Inflation Reduction Act, a rare legislative victory for President Biden that addresses climate-related issues, reduces the cost of prescription drugs, and increases taxes on corporations to help pay for it all. The Senate passed the bill four days earlier on a party-line vote, with Vice President Kamala Harris casting the deciding vote.
The bill now goes to the president’s desk for Biden’s signature.
“The package specifically includes $369 billion in energy security and climate investments and $64 billion to expand Affordable Care Act subsidies for two years.
“The bill offers incentives to businesses and consumers to make cleaner energy choices, including utilizing lower-carbon and carbon-free energy, and it creates new programs that will bolster investments in climate.
“On the health care end, the measure will allow Medicare to negotiate lower prices for 10 high-cost drugs starting in 2026. By 2029, that number is expected to grow to 20 drugs. Additionally, the measure allows caps to be placed on some drug costs, but mainly for Medicare.
“To pay for the legislation, Democrats have written in a 15 percent minimum tax on income that large corporations report to their shareholders. According to the Joint Committee on Taxation, only about 150 firms would be affected.
“The bill also allocates $80 billion to increase enforcement at the Internal Revenue Service and ensure that wealthy individuals and corporations are not evading taxes. Additionally, a 1 percent excise tax on stock buybacks is included in the bill.”
A ton of outlets have examined the bill and offered some insights on what it means for businesses, taxpayers, and those who serve them. Here are some of best analyses we’ve seen so far.
- Here’s what’s in the Inflation Reduction Act (from The Hill)
- AICPA comments on bill’s tax provisions (from the AICPA)
- $80 billion for IRS: What that means for taxpayers (from CNBC)
- Key tax provisions in the reconciliation bill (from the Journal of Accountancy)
- Inside the Inflation Reduction Act (from Accounting Today)
- A surprise for small businesses in the Inflation Reduction Act (from the BBJ)
- Is the IRS hiring 87,000 new agents? (from Snopes.com)
- Inflation Reduction Act may backfire: Tax Foundation (from CFO Dive)