With the reconciliation legislation approved by the U.S. Senate and set for a vote in the House this afternoon, manufacturers across the country are working to understand how the legislation would impact their work.
- The NAM has compiled a policy guide to offer some useful information about the bill and the path forward, with some highlights below.
The background: The NAM strenuously opposed the budget reconciliation bill, in part due to the tax and price-setting measures that would impact manufacturers negatively and harm pharmaceutical innovation.
- The NAM’s sustained advocacy efforts succeeded in changing some of the most egregious elements in the bill, including the so-called “book tax,” but other harmful provisions still remain.
Taxes: The legislation creates a new 15% corporate alternative minimum tax that applies to corporations with a three-year average adjusted financial statement income exceeding $1 billion.
- It also creates a 1% excise tax on stock buybacks and extends the current limits on business losses that can be deducted by noncorporate taxpayers—$270,000 for individuals and $540,000 for joint filers—to 2028.
- To help enforce tax laws, it provides $45 billion in enforcement funding for the IRS.
Health care: The bill creates a $3 billion program within the Department of Health and Human Services to allow the federal government to lead negotiations involving Medicare drug pricing—a provision strongly opposed by the NAM.
- In addition, the bill expands expiring Affordable Care Act subsidies for all ACA beneficiaries and extends tax credits to 2025 for taxpayers whose household income exceeds 400% of the poverty line.
Clean energy: The bill extends tax credits for renewable energy projects, increases credits for carbon capture and creates a new credit for energy from qualified nuclear plants.
- It also creates and extends a variety of credits for clean hydrogen production, biodiesel, renewable diesel and alternative and second-generation biofuels and offers new incentives for energy-efficient homes as well as clean and electric vehicles.
- In addition, the bill includes significant investments in green energy manufacturing, including a new advanced manufacturing production tax credit.
Learn more: For more information, check out the full policy guide here.