Winners and losers from the Democratic tax, health care and climate change bill (2022)

The Senate has passed a massive climate, tax and health bill that is a big win for Democrats, who have been trying to get some version of the measure completed for much of President Biden’s term in office.

There are clear political winners and losers throughout the legislation, which makes changes to the tax code and provides large investments for efforts to fight climate change.

Here’s a look at some of them.

WINNERS

Charles Schumer

Sen. Charles Schumer (D-N.Y.) emerged as perhaps the biggest winner in his second year as Senate majority leader, keeping his caucus unified when it counted most to deliver major climate and prescription drug reform legislation, two top priorities that have eluded Democrats for years.

Schumer took a victory lap Sunday afternoon when he told reporters gathered in the Capitol that Democrats had passed the bill.

The senior New York senator had promised fellow Democrats big and bold legislative accomplishments for months and he delivered several of them in the Inflation Reduction Act.

Senate Democrats said they would have liked to pass even more expansive proposals to curb global-warming emissions, lower drug prices and reform the tax code.

But the overwhelming majority of them feel elated they managed to pass a bill that will reduce climate-changing emissions by 40 percent over 10 years and give the federal government new power to negotiate with the pharmaceutical industry.

— Alexander Bolton

Joe Manchin

(Video) The winners and losers of the Democrats' climate and economic bill

Sen. Joe Manchin (W.Va.) maximized his political leverage as a conservative Democrat representing a state that former President Trump won by huge margins in 2016 and 2020 to reshape the Democratic agenda.

Manchin did so by opposing most of President Biden’s ambitious social spending agenda, an extension of the expanded child tax credit, expanded access to child care, a national paid family leave program and long-term home care for the elderly and disabled.

Manchin argued that hundreds of billions of dollars in new social spending programs would become embedded into future federal budgets and change the social fabric of the country into one too dependent on government largesse.

He instead pushed through a plan to pay down nearly $300 billion in federal debt over the next decade by agreeing to a new 15 percent corporate minimum tax, Medicare authority to negotiate lower drug prices, a new excise tax on corporate buybacks and more funding for the IRS to enforce tax compliance.

Manchin secured significant concessions to the fossil fuel industry, such as requirements for the federal government to auction more land for oil drilling and tax credits for carbon capture technology to help coal-fired power plants stay competitive and language to speed construction of a gas pipeline through his state.

— Alexander Bolton

Kyrsten Sinema

Sen. Kyrsten Sinema (D-Ariz.) followed Manchin’s strategy of using her reputation as a centrist to become a principal in the negotiations over the final shape of the bill.

Sinema knocked out proposals to raise the corporate tax rate from 21 percent to 25 percent and raise the top marginal income tax rate on the nation’s wealthiest individuals and families.

She played a central role in negotiating the prescription drug reform piece of the Inflation Reduction Act, narrowing the scope of Medicare’s negotiating authority to only 10 drugs starting in 2026 and then later 20 pharmaceuticals by 2029.

Sinema used her leverage right up until final passage of the bill by insisting that Schumer drop a proposal favored by Manchin to close the so-called carried interest tax loophole, which lets asset managers pay lower tax rates on income earned from profitable investments than many middle-class Americans do on regular income.

She paved the way for the one Republican amendment sponsored by Senate Republican Whip John Thune (S.D.) to be adopted to the bill, a proposal to exempt subsidiaries owned by private equity groups from the 15 percent minimum tax.

(Video) Schumer speaks on massive climate, tax bill after securing Democratic support — 8/5/22

—Alexander Bolton

Private equity

The final bill received two last-minute concessions to Wall Street’s private equity sector with the help of Sinema.

The original Manchin-Schumer agreement included a measure to close the so-called carried interest loophole that allows hedge fund and private equity managers to pay a 23.8 percent tax rate, well below the top tax rate of 37 percent.

In a lobbying blitz directed primarily at Sinema, whose top campaign donors include several private equity firms, the industry argued that increased taxes would hurt private investment in small businesses.

In a statement on Thursday, Sinema said that she would work to pass carried interest reforms in a future bill, but GOP opposition would likely block that effort unless Democrats maintain control of Congress after November’s midterms.

Sinema and several other Democrats also voted on Sunday afternoon for an amendment proposed by Thune that featured a carveout for businesses owned by private equity firms, exempting them from the bill’s central revenue-raising provision of a 15-percent minimum tax on large corporations.

— Karl Evers-Hillstrom and Tobias Burns

Retailers

Big box stores successfully pushed for a minimum corporate tax while also opposing Democrats’ initial plan to raise the corporate tax rate from 21 percent to 25 percent.

Retailers typically pay at or near the full corporate tax rate because they often don’t qualify for a slew of tax breaks offered to manufacturers and foreign firms. While General Motors and Chevron paid next to nothing in federal taxes last year, Walmart and Target paid 25 percent and 22 percent, respectively.

“The agreement struck accomplishes all the objectives retailers have set out to achieve throughout the debate on corporate taxes: permanent lower rates, fairness to ensure all are contributing, and better enforcement to collect what is legally owed,” the Retail Industry Leaders Association, which represents Target, Best Buy and others, said in a statement on the Inflation Reduction Act.

(Video) Democrats' climate, energy, tax bill clears hurdle in Senate

— Karl Evers-Hillstrom

Climate change efforts

The planet itself is expected to be a winner of the reconciliation bill, which is expected to help the U.S. make strides in the fight against climate change.

The bill includes provisions such as tax credits to encourage clean energy deployment, which could help shift the U.S. away from fossil fuels, as well as other programs aimed at combating climate change.

A preliminary report from theREPEAT Project found that the legislation is expected to cut U.S. emissions by 42 percent by 2030 when compared to 2005 levels. That’s significantly more than the 27 percent reduction estimated from current policy.Think tank Energy Innovationprojected emissions would be reduced by 37 percent to 41 percent, and called the legislation “the most significant federal climate and clean energy legislation in U.S. history.”

The U.S. is the second-largest global emitter, so cutting back its climate contribution is expected to be a big deal for the whole world.

Other measures expected to cut emissions include a program that puts a fee on excess methane emissions from the oil and gas sector, incentives for efficiency and capturing carbon emissions from the industrial sector and tax credits and rebates for electrification and efficiency upgrades for buildings.

The package isn’t all good for climate change efforts. It also requires the Interior Department to open up new oil and gas drilling as a requirement to open up new acreage for solar and wind energy.A separate side dealthat helped secure Manchin’s supportcould also helpadvance a contested natural gas pipeline that runs through West Virginia and is backed bythe senator.

— Rachel Frazin

LOSERS

Senate GOP

Unlike Schumer, who held a press conference Sunday afternoon to celebrate the legislative victory, Senate Republican Leader Mitch McConnell (Ky.) kept a lower profile and didn’t take questions from reporters after the final vote.

(Video) Senate Democrats pass climate, tax and health care bill

Less than a month ago, Republicans thought they had successfully defeated Democrats’ efforts to raise taxes and spend hundreds of billions on transitioning the U.S. economy to green technologies.

Feeling confident that Democrats would have to settle on a narrow reconciliation package focused on prescription drug reform and health insurance subsidies, Republicans helped Schumer pass a $280 billion bill to help the domestic semiconductor industry and invest in scientific research.

When Schumer and Manchin surprised their colleagues by announcing a sweeping deal to raise corporate taxes and subsidize electric vehicles, solar panels and wind turbines, Republicans felt betrayed.

Now vulnerable Democrats have an impressive list of accomplishments to tout on the campaign trail.

The silver lining for Republicans is they also now have a much larger stockpile of political ammo to use against incumbents such as Sens. Raphael Warnock (D-Ga.) and Catherine Cortez Masto (D-Nev.) after forcing them to vote on proposals to repeal a 16.4 cent a gallon tax on foreign oil imports and a ban on the IRS targeting individuals and small business owners who make under $400,000 a year with audits.

— Alexander Bolton

Some large multinational companies

The bill’s 15 percent minimum corporate tax deals a rare blow to corporate giants that have been paying lower federal taxes than the average small business for years.

The proposal only applies to companies with average annual earnings surpassing $1 billion, or $100 million earned in the U.S. for foreign-owned firms. As such, just 150 companies would be subject to the minimum tax each year, according to an estimate from the Joint Committee on Taxation.

Those include Amazon, which paid just 6 percent in federal taxes on its record $35 billion in profits last year. AT&T raked in nearly $30 billion but actually received $1.2 billion more in rebates from the federal government than it paid in taxes.

Companies that don’t benefit as much from accelerated depreciation — a lucrative deduction for capital investments that Sinema insisted should be excluded from the minimum tax following manufacturing industry lobbying — are likely the biggest losers.

For example, Bank of America paid a 3 percent federal tax rate from 2018 to 2019, but only 6 percent of its tax breaks stemmed from accelerated depreciation,according to an analysisfrom the Institute on Taxation and Economic Policy. But the deduction accounted for 100 percent of FedEx’s tax breaks as the company enjoyed a negative tax rate over the same period.

(Video) Senate Democrats pass sweeping healthcare, tax and climate bill

The bill’s 1 percent tax on buybacks, meanwhile, will force some of the biggest multinational companies to think twice before they approve share repurchases to boost their stock price and reward investors.Apple planned to buy back up to $90 billion this year, while Morgan Stanley and Nike announced $20 billion and $18 billion buyback programs, respectively.

— Karl Evers-Hillstrom

For the latest news, weather, sports, and streaming video, head to The Hill.

 The Senate has passed a massive climate, tax and health bill that is a big win for Democrats, who have been trying to get some version of the measure completed for much of President Biden’s term i…

Manchin argued that hundreds of billions of dollars in new social spending programs would become embedded into future federal budgets and change the social fabric of the country into one too dependent on government largesse.. He instead pushed through a plan to pay down nearly $300 billion in federal debt over the next decade by agreeing to a new 15 percent corporate minimum tax, Medicare authority to negotiate lower drug prices, a new excise tax on corporate buybacks and more funding for the IRS to enforce tax compliance.. Manchin secured significant concessions to the fossil fuel industry, such as requirements for the federal government to auction more land for oil drilling and tax credits for carbon capture technology to help coal-fired power plants stay competitive and language to speed construction of a gas pipeline through his state.. The final bill received two last-minute concessions to Wall Street’s private equity sector with the help of Sinema.. The original Manchin-Schumer agreement included a measure to close the so-called carried interest loophole that allows hedge fund and private equity managers to pay a 23.8 percent tax rate, well below the top tax rate of 37 percent.. Sinema and several other Democrats also voted on Sunday afternoon for an amendment proposed by Thune that featured a carveout for businesses owned by private equity firms, exempting them from the bill’s central revenue-raising provision of a 15-percent minimum tax on large corporations.. The bill’s 15 percent minimum corporate tax deals a rare blow to corporate giants that have been paying lower federal taxes than the average small business for years.. For example, Bank of America paid a 3 percent federal tax rate from 2018 to 2019, but only 6 percent of its tax breaks stemmed from accelerated depreciation, according to an analysis from the Institute on Taxation and Economic Policy.

 The Senate has passed a massive climate, tax and health bill that is a big win for Democrats, who have been trying to get some version of the measure completed for much of President Biden’s term i…

There are clear political winners and losers throughout the legislation, which makes changes to the tax code and provides large investments for efforts to fight climate change.. Sen. Charles Schumer (D-N.Y.) emerged as perhaps the biggest winner in his second year as Senate majority leader, keeping his caucus unified when it counted most to deliver major climate and prescription drug reform legislation, two top priorities that have eluded Democrats for years.. Manchin argued that hundreds of billions of dollars in new social spending programs would become embedded into future federal budgets and change the social fabric of the country into one too dependent on government largesse.. He instead pushed through a plan to pay down nearly $300 billion in federal debt over the next decade by agreeing to a new 15 percent corporate minimum tax, Medicare authority to negotiate lower drug prices, a new excise tax on corporate buybacks and more funding for the IRS to enforce tax compliance.. Manchin secured significant concessions to the fossil fuel industry, such as requirements for the federal government to auction more land for oil drilling and tax credits for carbon capture technology to help coal-fired power plants stay competitive and language to speed construction of a gas pipeline through his state.. The final bill received two last-minute concessions to Wall Street’s private equity sector with the help of Sinema.. The original Manchin-Schumer agreement included a measure to close the so-called carried interest loophole that allows hedge fund and private equity managers to pay a 23.8 percent tax rate, well below the top tax rate of 37 percent.. Sinema and several other Democrats also voted on Sunday afternoon for an amendment proposed by Thune that featured a carveout for businesses owned by private equity firms, exempting them from the bill’s central revenue-raising provision of a 15-percent minimum tax on large corporations.. Big box stores successfully pushed for a minimum corporate tax while also opposing Democrats’ initial plan to raise the corporate tax rate from 21 percent to 25 percent.. The bill’s 15 percent minimum corporate tax deals a rare blow to corporate giants that have been paying lower federal taxes than the average small business for years.. AT&T raked in nearly $30 billion but actually received $1.2 billion more in rebates from the federal government than it paid in taxes.. For example, Bank of America paid a 3 percent federal tax rate from 2018 to 2019, but only 6 percent of its tax breaks stemmed from accelerated depreciation, according to an analysis from the Institute on Taxation and Economic Policy.

Senate Democrats after a very long series of votes have approved a massive $740 billion bill that will make significant investments in climate change while lowering the price of prescription drugs …

( The Hill ) — Senate Democrats after a very long series of votes have approved a massive $740 billion bill that will make significant investments in climate change while lowering the price of prescription drugs and taking steps toward a more equitable tax code.. The Senate was in session Saturday, beginning a vote-a-rama at 11:30 p.m. Saturday that continued through Sunday in which Democrats blocked GOP amendment after GOP amendment.. That changed after 2 p.m. Sunday, when Sen. Kyrsten Sinema (Ariz.) and six other Democrats backed a measure that raised revenue by extending for one year the cap on state and local tax (SALT) deductions that was a key feature of the 2017 Trump tax cut bill.. Democrats initially worried passage of that amendment could hurt the bill, but after its passage, they offered another amendment that replaced the SALT cap extension with a different tax provision.. While the larger story was Democrats battling off GOP amendments, Democrats also killed off multiple amendments from one of their own caucus members: Sanders, the two-time presidential candidate.. In one of the night’s most heated moments on the floor, Sanders offered an amendment to revive the expanded child tax credit, which lapsed late last year, as part of the Democrats’ sprawling package.. As the debate continued and Sanders pushed back at Brown, asking what harm there would be in at least forcing those Democrats opposed to the tax credit from killing it while the rest of the caucus— 48 senators in all — voted for it, Brown could be heard saying “come on, Bernie.”. In the end, Democrats did stick together — with Republicans but without Sanders — voting down the amendment 1-99.. At one time the package House and Senate Democrats envisioned would have included the child tax credit and a lot more.. Democrats essentially had to buy off Manchin and then Sinema to get the bill through the Senate, and both used their leverage to get a lot of what they wanted.. Sen. Bob Menendez (D-N.J.) said he would vote against the final reconciliation bill if it included any Republican-sponsored amendments on immigration and some Western Democrats warned they might vote “no” if a drought relief provision sought by Sinema penalized their home states.. In his first year in office, Biden saw Democratic majorities approve a massive coronavirus relief package months into his term, and later a trillion-dollar infrastructure bill that will make major investments in roads and bridges across the country.. Democrats voted en masse to defeat several attempts by Sanders to change the bill after Schumer urged them to keep the legislation free of changes.

Democrats pushed their election-year economic package to Senate passage Sunday, a hard-fought compromise less ambitious than President Joe Biden’ s original domestic vision but one that still meets deep-rooted party goals of slowing global warming, moderating pharmaceutical costs and taxing immense corporations. “Today, Senate Democrats sided with...

Democrats pushed their election-year economic package to Senate passage Sunday, a hard-fought compromise less ambitious than President Joe Biden’s original domestic vision but one that still meets deep-rooted party goals of slowing global warming, moderating pharmaceutical costs and taxing immense corporations.. “Today, Senate Democrats sided with American families over special interests,” President Joe Biden said in a statement from Rehoboth Beach, Delaware.. “Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” Senate Minority Leader Mitch McConnell, R-Ky., argued.. Republicans forced their own votes designed to make Democrats look soft on U.S.-Mexico border security and gasoline and energy costs, and like bullies for wanting to strengthen IRS tax law enforcement.. Before debate began, the bill’s prescription drug price curbs were diluted by the Senate’s nonpartisan parliamentarian who said a provision should fall that would impose costly penalties on drug makers whose price increases for private insurers exceed inflation.. Most Republicans voted to strip it from the package, though in a sign of the political potency of health costs seven GOP senators joined Democrats trying to preserve it.. The money would come from a 15% minimum tax on a handful of corporations with yearly profits above $1 billion, a 1% tax on companies that repurchase their own stock, bolstered IRS tax collections and government savings from lower drug costs.

Inflation bill clears Senate. Financial statement AMT, buyback tax included, carried interest changes dropped. Transferable energy credits. Used EV credits. Cats and spiders.

Along with a new 15% corporate minimum tax , it creates a 1% excise tax on companies’ stock buybacks and sets aside roughly $300 billion toward reducing the deficit.. The bill includes a 15% alternative minimum tax on adjusted financial statement income for corporations with profits over $1 billion, and a nearly $80 billion funding boost for the Internal Revenue Service .. The new taxes that made it into the Senate's final bill are a 1 percent tax on what public companies spend on stock buybacks and a 15 percent minimum tax based on corporations' income reported to shareholders.. The minimum tax is aimed at preventing the largest corporations, those earning at least $1 billion, from paying very low effective tax rates.. For example, Bank of America paid a 3 percent federal tax rate from 2018 to 2019, but only 6 percent of its tax breaks stemmed from accelerated depreciation, according to an analysis from the Institute on Taxation and Economic Policy.. But the deduction accounted for 100 percent of FedEx’s tax breaks as the company enjoyed a negative tax rate over the same period.Companies with at least $1 billion in income would be required to calculate their annual tax liability two ways: one using longstanding tax accounting methods, which is 21% of profits less deductions and credits; the other by applying the 15% rate to the earnings they report to shareholders on their financial statements, commonly known as book income.. Another major critique of the bill as originally drafted was that some companies wouldn’t be able to claim all the deductions allowed under the tax code, notably tax benefits known as depreciation for investments in equipment and buildings.. In a letter to leaders of Congress's main tax committees, the House Ways and Means Committee and the Senate Finance Committee, the AICPA said it believes the corporate alternative minimum tax proposal violates a number of elements of good tax policy and could lead to unintended consequences that should be carefully considered.. "The IRA offers about $260 billion in environmental tax credits, the most important of which are the renewable energy production tax credit (PTC) and investment tax credit (ITC).. The PTC provides a subsidy of up to 2.6 cents per kilowatt hour of renewable energy produced for a project’s first 10 years, and the ITC provides an investment tax credit of 10-30 percent of a renewable energy project’s capital cost.. The Inflation Reduction Act, as the climate and tax bill is called, extends and boosts lucrative tax credits for wind and solar, allowing homeowners and project developers to claim up to 30% of the value of a project as a credit in the case of solar and a per-watt credit for wind.. Reimagining Tax Administration: Social Programs Through the Tax Code – Characteristics of the EITC/Advance CTC Population - Nina Olson, Procedurally Taxing.

The $700 billion package of energy and climate tax credits, incentives passed the U.S. Senate and is slated to pass the U.S. House.

Clean energy developers, farmers, ranchers, forest and home owners in Oregon are slated to get hundreds of millions of dollars in grants, tax credits and incentives from legislation that passed the U.S. Senate this weekend.. The 775-page package includes tax credits and incentives for producers of nuclear power, geothermal, wind, wave and solar energy as well as “clean hydrogen,” a controversial form of clean energy that not all environmentalists favor.. It also includes rebates for farmers and forest landowners who invest in projects that sequester carbon dioxide and create less waste; for homeowners who invest in energy efficiency, solar panels and electric heating and cooling pumps; and for buyers of used and new electric cars.. A jump start for clean energy projects Tax incentives for energy storage and solar energy facilities, offshore wind and wave projects would enable some cost-prohibitive clean energy projects in Oregon to move forward.. In Klamath Falls, a clean energy storage project called Swan Lake that has been on hold would be able to start up.. In May, Chapman went to Washington D.C. as part of a delegation of Oregon businesses to meet with Wyden and his tax experts to discuss incentives they’d need to move projects like Swan Lake forward.. “We really thought this bill was dead, Build Back Better was dead,” she said of the infrastructure, climate and social programs package House Democrats passed more than six months ago that died in the Senate.. She said the inflation act gives Oregon the catalyst it needs for clean energy development.. The company is also working on prototypes for floating offshore wind platforms and wave energy projects with Oregon State University and the U.S. and Oregon departments of energy.. The package includes $9 billion for consumer home energy rebate programs, and boosts the income tax rebate on solar panels from 22% to 30% of the cost.. For Oregonians interested in a new electric vehicle, a rebate up to $15,000 would be available under state and federal programs.. Advocates mostly welcome proposal Celeste Meiffren-Swang, director of Environment Oregon, an environmental advocacy group, has been working on getting a large federal climate bill passed for more than a year.. “The more we can move toward electric vehicles and homes, the less we have to worry about the price of oil and gas being determined half a world away,” she said.. Wyden said the bill is, in large part, an overhaul of the tax code which had traditionally favored the fossil fuel industries at the expense of investing in renewable energy.

Videos

1. Senate passes Inflation Reduction Act, Biden's sweeping health care and climate bill
(CNBC Television)
2. US Senate passes landmark climate bill | DW News
(DW News)
3. Senate Democrats' climate and tax bill could have major effects on electric vehicle market, energy
(CBS News)
4. Senate advances massive health care, climate and tax reform legislation
(CBS News)
5. Senate Passes Sweeping Health Care And Climate Bill
(TODAY)
6. Democratic Healthcare, Economic, And Climate Bill Passed
(NBC News)

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