The US Senate, on 7 August, voted 51 to 50 along party lines to pass the “Inflation Reduction Act'' budget reconciliation bill (the bill). The tie-breaking vote in the evenly divided Senate was provided by Vice President Kamala Harris.
The Senate action clears the way for the House to return from its August recess on Friday 12 August to consider the bill. President Biden and Democratic leaders hope to see the narrowly divided House approve the bill without change so it can be signed into law before the end of August.
Key revenue-raising provisions include:
- a 15% book-income alternative minimum tax on corporations with financial accounting profits over $1 billion, which has been estimated to raise $258 billion over 10 years prior to a Senate floor amendment described below;
- a 1% excise tax on a publicly traded US corporation for the value of its stock that is repurchased by the corporation during the tax year, which is estimated to raise $74 billion over 10 years;
- an $80 billion increase in IRS tax enforcement funding, which is projected to increase federal tax receipts by $204 billion over 10 years; and
- a two-year extension of the excess business loss rules under Section 461(l), adopted under a Senate floor amendment which was stated by its sponsor to raise $55 billion over 10 years.