The reform notably provides for the adoption of a minimum tax rate for large companies.
The Biden administration's investment plan aims, among other things, to reduce prescription drug costs for the elderly and to combat climate change.
U.S. President Joe Biden signed into law his sweeping climate and health investment plan on Tuesday, bringing his Democratic camp a significant political victory less than three months from pivotal legislative elections.
< p class="e-p">The bill, which represents the largest investment by the United States in the fight against climate change, provides a series of financial incentives intended to move the American economy towards renewable energies, limits the price of certain drugs and creates a minimum tax rate on large companies.
A country can be transformed. This is what is happening today, Mr. Biden said in an election-sounding speech before signing the reform, dubbed the Inflation Reduction Act, at the White House.
This is about the future. This is about bringing progress and prosperity to American families, he said.
“This is about showing America and the American people that democracy still works in the United States.
—Joe Biden, President of the United States
The result of difficult negotiations with the right wing of the Democratic Party, the envelope includes the largest never before committed investment in the United States for the climate – 370 billion dollars to reduce greenhouse gas emissions by 40% by 2030.
The second part of this major investment plan intends to partially correct the huge inequalities in access to care in the United States, in particular by lowering the price of drugs.
Medicare, a public health insurance system intended for people over 65, among others, will for the first time be able to negotiate the price of certain drugs directly with pharmaceutical companies, and thus obtain more competitive costs.
To finance these investments, the reform provides for the adoption of a minimum tax rate of 15% for all companies whose profits exceed one billion dollars. This new tax aims to prevent certain large companies from using the tax loopholes which until now allowed them to pay much less than the theoretical rate.
According to estimates, this measure could generate more than $258 billion in US federal revenue over the next ten years.