Sen. Joe Manchin, who spearheaded the bill.

Democrats are on the brink of passing their proposed $739 billion Inflation Reduction Act.
The bill provides for cheaper prescription drugs, EV tax credits, and a levy on stock buybacks.
Here’s what you need to know about the proposed legislation, and how it could affect you.

The Democrats are on the brink of passing their $739 billion Inflation Reduction Act (IRA) after weeks of negotiation culminating in the approval late Thursday from the last of the party’s holdout senators. 

The proposed legislation provides for cheaper prescription drugs, free vaccines for seniors, and generous tax credits for electric vehicles, among other things. It also aims to create more than 1 million jobs. Moody’s says the IRA is likely to live up to its name and rein in soaring inflation.

However, late-night wrangling Thursday resulted in notable changes to the legislative package. Notably, plans to close the carried interest loophole were dropped in favour of a new levy on stock buybacks.

Here’s what’s new in the IRA, what’s stayed the same, and what it means for you.

Hedge fund, private equity, and real estate executives rejoice

Sen. Kyrsten Sinema has been a thorn in the bill’s side.

Democrats have engaged in protracted wrangling over the tax legislation in the IRA. The bill only won the crucial backing of Arizona Sen. Kyrsten Sinema late Thursday after plans were dropped to close the long-criticized carried interest loophole. 

Executives in the hedge fund, private equity, and real estate investment businesses benefit from a tax break for carried interest. In simple terms, when they take a percentage of profits from an investment as compensation, they’re taxed at the capital-gains rate, which is lower than the comparable income-tax rate.

The IRA aimed to …read more

Source:: Business Insider

      

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