US Senate $430 Billion Climate Bill to Add Stock Repurchase Tax

WASHINGTON (Reuters) – The climate, drug and tax bill of about $430 billion that U.S. Senate Democrats are trying to push through Congress includes a new tax on stock buybacks, majority leader Chuck Schumer said Friday.

Lawmakers agreed to add that provision after striking a deal with Democrat Kyrsten Sinema, a maverick who has often stood in the way of President Joe Biden’s priorities, to drop another provision calling for new taxes. would have imposed on the carry rate.

“We’re adding a tax on share buybacks that will bring in $74 billion,” Schumer told reporters. He has not given the effective date for the new tax when the legislation is enacted into law.

“I hate stock buybacks,” Schumer said, adding, “I think they’re one of the most selfish things corporate America does.” The New York Democrat said companies should instead invest in employee training, research, equipment modernization and other activities.

Democrats are currently awaiting a ruling from the House MP on whether they can use a special procedure to pass the bill by a simple majority, rather than the normal 60 out of 100 votes needed to pass the unified Republican. circumvent opposition.

They are currently planning an unusual weekend session to move forward on the bill, which would accomplish the Biden administration’s key goals ahead of the Nov. 8 midterm elections, when control of Congress is at stake. state.

All 100 senators will have the chance to amend the legislation this weekend amid stiff Republican opposition.

The bill, called the Inflation Reduction Act, was unveiled last week by Schumer and Senator Joe Manchin, who, like Sinema, has often blocked the party’s agenda.

It aims to reduce the cost of prescription drugs by allowing Medicare, the government-run health care plan for the elderly and disabled, to negotiate prices for a limited number of drugs.

It would also tackle climate change through new investment in non-carbon-emitting energy, while improving tax collection for businesses and high net worth individuals.

The bill, as originally written, would have spent about $430 billion, while reducing the government deficit by about $300 billion.

The final price tag could change once the legislation is formally introduced this weekend, if everything goes according to plan.

Sinema revealed late Thursday that she would support the bill with some changes, including adding funding for drought relief.

Sinema said she would not support the bill unless Democrats scrap the carry-rate provision, a long-standing Wall Street tax benefit that has seen many private equity and hedge fund financiers pay a lower capital gains tax rate on much of their income, instead. of the higher income tax. wages paid by wage earners.

Instead, the Democrats have added the excise tax, which is estimated to bring in more than $70 billion.

(Reporting by Moira Warburton, Rose Horowitch and Richard Cowan; editing by Scott Malone and Alistair Bell)

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