On Sunday, the US Senate passed the so-called "anti-inflation law" with total funding for $750 billion in the areas of ecology, health and energy generation.
Where will the money for the anti-inflation law come from?
The developers of the bill plan to receive more than $700 billion over the next decade by fixing the minimum tax rate of 15% for corporations with an income of more than $1 billion, as well as introducing a 1% tax on share buybacks.
In the Democrat-controlled Senate, the vote took place with a minimum margin of 51-50, now on August 12, the law must pass the House of Representatives, which is controlled by the same Democrats, and get to Biden's table.
Where will the US government send the funds?
Climate: Biden's environmental agenda
The largest funding package concerns Joe Biden's environmental program to achieve the election goal. The main provision of the program was to reduce greenhouse gas emissions by 50% until 2030. In the USA, they are quite attentive to this direction, because if we leave the situation unchanged, by the end of the century the temperature in the country will be higher than in Dubai.
Against the background of climate warming, forest fires have more than tripled in the states, which also increases government spending on planting new forests. This package provides subsidies and tax benefits for a wide range of industrial enterprises. To a greater extent, utility and manufacturing companies will benefit from the transition of equipment to more environmentally friendly energy sources, and manufacturers of equipment for solar and wind energy.
While it is difficult to single out individual manufacturing companies, now their plans are more difficult to predict due to the recession. But there are also obvious brands like Enphase Energy (ENPH), Array Technologies (ARRY) and First Solar (FSLR).
Medicine: subsidies for fixing prices
In the medical direction, subsidies from the Medicare and Obamacare insurance programs will be introduced for medicines in pharmacies and prescriptions from doctors. Also, representatives of state insurance programs will be allowed to "bargain" with corporations to fix prices for the most necessary medicines like insulin. It is planned to start with ten names, expand the list to 15 by 2027 and bring it to 20 by 2029.
Subsidies in this direction will not have a significant impact on manufacturers of medicines, but rather will act as additional social protection of the population.
Electrification and electric cars: tax benefits
The text of the bill provides for stimulation in the form of tax benefits for individuals. When transferring home electricity supply to a wide range of different sources of alternative energy, citizens of the country will receive a tax cut that in the United States is almost 50%. This will benefit both citizens themselves and utility companies like Chinese component manufacturer JinkoSolar (JKS) and energy generating Entergy Corporation (ETR), Clearway Energy (CWEN), Vistra Energy Corp. (VST).
The incentive measures from the new law also apply to electric car manufacturers and will be useful for Ford (T), Tesla (TSLA), Toyota Motor (TM) and Rivian Automotive (RIVN).