A U-turn: US Senator Joe Manchin agrees to $369-billion tax bill

Senator Joe Manchin and Majority Leader Chuck Schumer struck a deal on a tax, energy and climate bill, breaking a deadlock on the Democrats’ long-sought legislation to enact major parts of President Joe Biden’s agenda. The plan would provide 

$369 billion for “energy and climate change”, generate an estimated $739 billion in revenue, and reduce deficits by $300 billion over a decade. Here are the highlights of what’s in the deal:

Corporate taxes

The bill imposes a 15% minimum corporate levy on firms that have traditionally paid little-to-no taxes thanks to credits and deductions

IRS enforcement

The Internal Revenue Service would get $80 billion to add auditors, modernise tech

Carried interest

The plan would end the carried-interest tax break used by private equity and hedge fund managers to lower tax bills

Electric car credits

The bill has tax credits for lower- and middle-income buyers of used and new electric vehicles

Renewable energy credits

The plan has $60 billion of incentives to bring clean energy manufacturing into the US

Consumer energy perks

There would be tax credits for consumers who add renewable energy items to their homes, including efficient heat pumps, rooftop solar,  and water heaters

Drug prices

The bill would direct the government to negotiate drug  prices with makers, and cap what seniors on Medicare pay for drugs each year at $2,000

Obamacare premiums

The plan would also extend to 2025 an expansion in Affordable Care Act premium subsidies that’s currently set to end at year-end

It remains unclear whether the deal will be backed by the full Democratic caucus in the 50-50 Senate.