A strong boost for renewable energies, cheaper medicines and a corporate tax: This is what Joe Biden’s major investment plan, which was finally approved by the American Congress on Friday, provides for. A win for the White House tenant that Democrats needed ahead of November’s general election.
- 370 billion for the climate
This is the largest investment ever made in the United States to fight climate change.
Instead of penalizing polluters, the law provides a variety of financial incentives aimed at shifting the US economy to non-fossil fuel sources. A number of tax credits have been made available to producers and consumers of wind, solar and nuclear energy.
Under this reform, an American will receive up to $7,500 in tax credits for buying an electric car. The installation of solar panels on the roof is supported with 30%.
Around 60 billion dollars are also planned for the construction of wind turbines, solar panels and electric vehicles in the USA.
The same amount will go towards a range of programs to help the most humble households in their energy transition, particularly by renovating their homes.
Massive investments to strengthen forest resilience to the fires that are devastating the country and to protect coastal areas from hurricanes are also part of this reform. This project aims to enable the United States to reduce its CO2 emissions by 40% by 2030 compared to 2005 levels.
- 64 billion for health
The second part of this major investment plan aims to partially correct the huge inequalities in access to health care in the United States, particularly by reducing drug prices.
Medicare, a public health insurance system for people over 65 and those on the lowest incomes, will for the first time be able to negotiate the prices of certain drugs directly with pharmaceutical companies, giving them more competitive rates.
The plan will also force drug companies to offer consumer discounts for certain drugs whose prices are rising faster than inflation.
The bill also plans to extend the protections of the Affordable Care Act, better known as Obamacare, Barack Obama’s flagship law, until 2025.
- Corporations are taxed at 15%
Parallel to these massive investments, the so-called “Inflation Reduction Act” aims to reduce the state deficit by introducing a minimum tax rate of 15% for all companies whose profits exceed one billion euros.
This new tax aims to prevent certain large corporations from taking advantage of the tax loopholes that have allowed them to pay far less than the theoretical tax rate.
It is estimated that this measure could generate more than $258 billion in US federal revenue over the next 10 years.