President Biden's Infrastructure Plans

[lpetrich]

The bill itself: H.R.5376 - 117th Congress (2021-2022): Inflation Reduction Act of 2022 | Congress.gov | Library of Congress
The summary is very long, and I'll try to summarize it.

• Alternative minimum income tax of 15% on some large corporations
• Tax on stock buybacks of 1%
• Funding the IRS (the tax police): upgrading operations and creating a free electronic-filing tax-return system
• Medicare will can negotiate the prices of 10 drugs starting in 2026, 15 drugs starting in 2027, and 20 drugs starting in 2029.
• Out-of-picket spending for the Medicare prescription-drug benefit will be limited to $2,000.
• Insulin price cap of $35/month for Medicare, not more generally.
• Obamacare subsidies
• Extends existing tax breaks for renewable energy sources and adds tax breaks for nuclear energy, hydrogen production, electricity storage technologies, and synthetic fuels
• Lots of other stuff

The Senate vote
All 50 Democrats and Independents voted for it, and all 50 Republicans voted against it, and Vice President Kamala Harris broke this tie in the bill's favor.

The Independents, Bernie Sanders of VT and Angus King of ME, are Democrat-adjacent, caucusing with the Democrats.

The House vote
All 220 Democrats voted for it, and of the Republicans, 207 voted against it, with 4 not voting.

 

[lpetrich]

The four nonvoting Republicans aren't very notable, at least to me. Carl AL, Gallagher WI, Pence IN, Rogers AL.

Pence IN is Greg Pence of IN-06, brother of former VP Mike Pence.

NowThis on Twitter: "LIVE NOW: The House Progressive Caucus is holding a press briefing to discuss the Inflation Reduction Act, which is expected to come up for a vote later today (vid link)" / Twitter
With Reps. Pramila Jayapal, Marie Newman, Jamie Raskin, Mark Pocan, Adriano Espaillat, Barbara Lee, Raul Grijalva, Mark Takano, Debbie Dingell, Mondaire Jones

A bit of a self-congratulatory lovefest. Some of them expressed disappointment at what they didn't get in the bill.

I like this response:
Laurann Ryerson on Twitter: "@RepRaskin @USProgressives Watching C-Span today you could see the lies on the faces of the Republicans who were talking and trying to kill the bill. Unreal how they behaved and their faces showed how they were telling lies made up lies at that. The Republican party has lost it soul" / Twitter

 

[lpetrich]

Rep. Debbie Dingell liked how this bill contains tax breaks for electric cars.

Inflation Reduction Act One Page - inflation_reduction_act_one_page_summary.pdf

Estimated numbers:

• TOTAL REVENUE RAISED: $737 billion
• 15% Corporate Minimum Tax: $222 billion
• Prescription Drug Pricing Reform: $265 billion
• IRS Tax Enforcement: $124 billion
• 1% Stock Buybacks Fee: $74 billion
• Loss Limitation extension: $52 billion
• TOTAL INVESTMENTS $437 billion
• Energy Security and Climate Change: $369 billion
• Affordable Care Act Extension: $64 billion
• Western Drought Resiliency: $4 billion
• TOTAL DEFICIT REDUCTION: $300+ billion

 

[lpetrich]

Western Drought Resiliency?

Why Sinema insisted $4 billion for drought relief be added to Inflation Reduction Act

In exchange for supporting the Inflation Reduction Act, Sen. Kyrsten Sinema, D-Ariz., insisted that the legislation leave in place a tax loophole that benefits high earners in the private equity and real estate industries. That deal set off a flurry of media speculation about her motives, but it wasn’t the only successful request she made in order to secure her vote for the landmark climate legislation.

To properly address climate change, Sinema told her fellow Democrats, the bill needed to provide an extra $4 billion in funding for mitigating the effects of drought on her home state and the American West.

Arizonans Applaud Sinema’s Leadership Securing Critical Drought Funding for Arizona and Western States | Senator Kyrsten Sinema - at her official site

“Drought is an existential threat to western agriculture, especially agriculture that relies on water from the Colorado River. Arizona’s farmers are working non-stop to find ways to avoid the catastrophic consequences of drought on the Colorado River. We applaud Senator Sinema for recognizing the need to bring federal resources to the table to facilitate reductions in water use and voluntary conservation projects. Our state and nation cannot afford a crash on the Colorado River, and we are grateful for Senator Sinema’s leadership and support as we continue to find innovative solutions so we can continue producing the food and fiber on which all of us rely,” said Stefanie Smallhouse, President of the Arizona Farm Bureau.

“Valley Partnership is grateful for Senator Sinema's leadership in securing significant funding for drought mitigation projects. Our top priority is maintaining Arizona's precious resources through investments that will enhance efficiency, increase water reuse, and create water supplies for existing and future users. This includes enabling and engaging with Arizona Tribes. Senator Sinema has been a key partner in these efforts and we look forward to working on innovative ways to preserve and maintain our state's future water supply,” said Cheryl Lombard, President and CEO of Valley Partnership.

“Thank you Senator Sinema for securing $4 billion to help manage drought in Arizona and the West. Investing in projects like water recharge and reuse, voluntary system conservation and ecosystem and habitat restoration has never been more important. We look forward to working with you and all partners to make sure people and nature continue to thrive,” said Dan Stellar, State Director, The Nature Conservancy in Arizona.

I'm quoting this to try to guess what that money will be used for.

Kyrsten Sinema on Twitter: "The $4 billion I secured in the Inflation Reduction Act for Western drought relief and conservation is sorely need in Arizona and other states. Thank you, @nature_arizona for your support and for being a trusted partner as we work to secure Arizona's water future. (pic link)" / Twitter

 

[lpetrich]

An alternative to high drug prices is being worked on in California.

California will start making its own affordable insulin, Governor Gavin Newsom says - The Verge

Insulin prices are so high that California has decided to make its own, California Governor Gavin Newsom said on Thursday. $100 million of the state’s budget will be put into the effort, which seeks to make the lifesaving drug more affordable after years of skyrocketing prices.

“Nothing epitomizes market failures more than the cost of insulin,” Newsom said in a brief statement posted online, noting that patients can pay $300–$500 a month for the drug.

noting
Gavin Newsom on Twitter: "California is going to make its own insulin.
It’s simple. People should not go into debt to get life-saving medication. (vid link)" / Twitter
With some video of Gov. Newsom making that announcement.

But thanks to a mire of patents — among other issues — prices of insulin have recently risen to “absurdly high” levels, causing an estimated one in every four people with diabetes to ration their insulin doses, according to one study from 2019.

It’s against this backdrop that Newsom announced plans for CalRx in 2020. CalRx is a program to create generic drugs (including insulin) and sell them to Californians at lower costs either by partnering with manufacturers or creating their own. But the program has been slow to roll out — the insulin push, which Kaiser Health News reported on in June, may kickstart the effort.

State production will bring down high costs of insulin - CalMatters

The CalRx initiative, a groundbreaking solution to improve affordability, empowers the State of California to develop generic drugs and sell them at low cost. Through state-led manufacturing, CalRx will be the backstop for markets that fail to deliver affordable medications for Californians by promoting increased generic manufacturing to address such market failures as low competition, drug shortages and fragile supply chains.

CalRx’s first drug priority is insulin.

 

[ZiprHead]

From people who brag about how much they love soldiers and cops.

Few IRS personnel are armed, and Democrats say the bill’s $80 billion, 10-year budget increase would be to replace waves of retirees, not just agents, and modernize equipment. They have said typical families and small businesses would not be targeted, with Treasury Secretary Janet Yellen directing the IRS this week to not “increase the share of small business or households below the $400,000 threshold” that would be audited.

Right-wingers are freaking out all over about this.

 

[Harry Bosch]

The bill itself: H.R.5376 - 117th Congress (2021-2022): Inflation Reduction Act of 2022 | Congress.gov | Library of Congress
The summary is very long, and I'll try to summarize it.

• Alternative minimum income tax of 15% on some large corporations
• Tax on stock buybacks of 1%
• Funding the IRS (the tax police): upgrading operations and creating a free electronic-filing tax-return system
• Medicare will can negotiate the prices of 10 drugs starting in 2026, 15 drugs starting in 2027, and 20 drugs starting in 2029.
• Out-of-picket spending for the Medicare prescription-drug benefit will be limited to $2,000.
• Insulin price cap of $35/month for Medicare, not more generally.
• Obamacare subsidies
• Extends existing tax breaks for renewable energy sources and adds tax breaks for nuclear energy, hydrogen production, electricity storage technologies, and synthetic fuels
• Lots of other stuff

The Senate vote
All 50 Democrats and Independents voted for it, and all 50 Republicans voted against it, and Vice President Kamala Harris broke this tie in the bill's favor.

The Independents, Bernie Sanders of VT and Angus King of ME, are Democrat-adjacent, caucusing with the Democrats.

The House vote
All 220 Democrats voted for it, and of the Republicans, 207 voted against it, with 4 not voting.

I thought that we were suppose to be against funding the police! Kidding. But I'm not in favor of 15% minimum tax on "some large corporations". What is the definition of "some large corporations"?

 

[TomC]

What is the definition of "some large corporations"?

I'm nothing like an expert.
But my understanding is that it refers to corporations with over a billion in profit per year.
Tom

 

[Harry Bosch]

What is the definition of "some large corporations"?

I'm nothing like an expert.
But my understanding is that it refers to corporations with over a billion in profit per year.
Tom

Please show me an example of a corporation with over a billion in taxable profit that didn't pay any taxes last year.

 

[TomC]

What is the definition of "some large corporations"?

I'm nothing like an expert.
But my understanding is that it refers to corporations with over a billion in profit per year.
Tom

Please show me an example of a corporation with over a billion in taxable profit that didn't pay any taxes last year.

There are people on this forum with much better google-fu than, doubtless they can provide better stats.

But the tiny overall effective tax rates of huge corporations is no secret.
Tom

 

[Harry Bosch]

What is the definition of "some large corporations"?

I'm nothing like an expert.
But my understanding is that it refers to corporations with over a billion in profit per year.
Tom

Please show me an example of a corporation with over a billion in taxable profit that didn't pay any taxes last year.

There are people on this forum with much better google-fu than, doubtless they can provide better stats.

But the tiny overall effective tax rates of huge corporations is no secret.
Tom

KK. I'll wait. But curious as to your term "google-fu". Why does finding facts that support a position a "FU"?

 

[TomC]

Why does finding facts that support a position a "FU"?

Sorry, I'm old.
It's a reference to "fu" as in "skilled", such as kung-fu.
Tom

 

[ZiprHead]

55 Corporations Paid $0 in Federal Taxes on 2020 Profits

At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits in the United States. This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it...

itep.org

At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits in the United States. This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it appears to be the product of long-standing tax breaks preserved or expanded by the 2017 Tax Cuts and Jobs Act (TCJA) as well as the CARES Act tax breaks enacted in the spring of 2020.

The tax-avoiding companies represent various industries and collectively enjoyed almost $40.5 billion in U.S. pretax income in 2020, according to their annual financial reports. The statutory federal tax rate for corporate profits is 21 percent. The 55 corporations would have paid a collective total of $8.5 billion for the year had they paid that rate on their 2020 income. Instead, they received $3.5 billion in tax rebates.

Their total corporate tax breaks for 2020, including $8.5 billion in tax avoidance and $3.5 billion in rebates, comes to $12 billion.

 

[laughing dog]

55 Corporations in 2020 that paid no federal corporate income tax

What is the definition of "some large corporations"?

I'm nothing like an expert.
But my understanding is that it refers to corporations with over a billion in profit per year.
Tom

Please show me an example of a corporation with over a billion in taxable profit that didn't pay any taxes last year.

Here is a link - 55 corporations in 2020 that paid no federal corporate income tax . I count over 10 that had over a billion dollars with no taxes. Xcel energy and Charter Communications are two from the list.

 

[Harry Bosch]

55 Corporations Paid $0 in Federal Taxes on 2020 Profits

At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits in the United States. This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it...

itep.org

At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits in the United States. This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it appears to be the product of long-standing tax breaks preserved or expanded by the 2017 Tax Cuts and Jobs Act (TCJA) as well as the CARES Act tax breaks enacted in the spring of 2020.

The tax-avoiding companies represent various industries and collectively enjoyed almost $40.5 billion in U.S. pretax income in 2020, according to their annual financial reports. The statutory federal tax rate for corporate profits is 21 percent. The 55 corporations would have paid a collective total of $8.5 billion for the year had they paid that rate on their 2020 income. Instead, they received $3.5 billion in tax rebates.

Their total corporate tax breaks for 2020, including $8.5 billion in tax avoidance and $3.5 billion in rebates, comes to $12 billion.

But in our system, federal corporate taxes aren't based on income. It would be terrible if it did as the majority of companies don't make much profit. My company had a year 1 income of $633,000! But my expenses were double that. But being based in Washington, I did pay a lot of sales tax. Whether or not we want a national corporate sales tax is a different issue.

 

[Harry Bosch]

55 Corporations in 2020 that paid no federal corporate income tax

What is the definition of "some large corporations"?

I'm nothing like an expert.
But my understanding is that it refers to corporations with over a billion in profit per year.
Tom

Please show me an example of a corporation with over a billion in taxable profit that didn't pay any taxes last year.

Here is a link - 55 corporations in 2020 that paid no federal corporate income tax . I count over 10 that had over a billion dollars with no taxes. Xcel energy and Charter Communications are two from the list.

Well, I googled Charter Communications. Yes, they had great pre-tax revenue in 2020. But their taxable profit was reduced by very heavy depreciation (they had been on quite a capital investment spending spree) and heavy carry forward losses. These allowed expenses reduced their taxable profit to near zero. Nike was also on the list (love Nike! Love the Ducks!). Nike also had very little 2020 profit due to carry forward, R&D tax credits, and trump tax cuts (that allowed greater sheltering of off shore profits.

 

[TomC]

But their taxable profit was reduced by very heavy depreciation (they had been on quite a capital investment spending spree) and heavy carry forward losses.

I remember a big kerfluffle around here, years ago.
GE had a big plant in Bloomington, Indiana. When they closed it, they were paying effectively a negative income tax rate. Because the expense involved with moving to a new plant in Mexico were legitimate deductions.
Tom

 

[Harry Bosch]

But their taxable profit was reduced by very heavy depreciation (they had been on quite a capital investment spending spree) and heavy carry forward losses.

I remember a big kerfluffle around here, years ago.
GE had a big plant in Bloomington, Indiana. When they closed it, they were paying effectively a negative income tax rate. Because the expense involved with moving to a new plant in Mexico were legitimate deductions.
Tom

I'm definitely for reforming tax laws the don't make sense. I don't know much about the GE example above. But clearly, I don't favor a tax credit that encourages shutting down and moving operations to a foreign country. But I personally favor allowable reductions for carry forward losses, depreciation, and R&D. My larger issue in this thread is that I don't favor a national "sales" tax. And a tax on income rather than on profit is a sales tax.

 

[ZiprHead]

I did pay a lot of sales tax.

You mean your customers paid a lot of sales tax?

 

[Loren Pechtel]

What is the definition of "some large corporations"?

I'm nothing like an expert.
But my understanding is that it refers to corporations with over a billion in profit per year.
Tom

Please show me an example of a corporation with over a billion in taxable profit that didn't pay any taxes last year.

The thing is companies like Amazon avoid making a "profit" by using their profit to buy up companies.