Biden's New “Inflation Reduction” & Targeted Stimulus Bill.

today is july 28th and we've got a new

bill from congress to go through but a

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hey everyone we kevin here well congress

is back at it again with another 725

a page a spending bill this one is

called the inflation relief act of 2022

or inflation reduction act of 2022 and

it proposes

433 billion dollars in spending a far

cry from the a 3.5 billion dollar build

back better plan that joe biden was

going for it does come on the heels of

the chips bill passing that's the 52

billion dollar chips build up just past

the senate and while this bill is not

passed yet

it does have mansion support to get

through budget reconciliation that

doesn't mean it's going to pass but

let's get into some of the weeds to see

exactly what this bill does and what

this bill doesn't do

all right folks here are some of the

details so first 433 billion dollars in

spending 300 billion dollars in deficit

reduction and i'll show you some of the

ways they're actually thinking about

getting revenue into this they do think

they're going to get 739 billion dollars

in revenue they're branding this as

something that's going to stabilize

prices by reducing the cost of

energy related investments and electric

vehicles we'll talk about those along

with new tax credits for everyday folks

now they're also going to be increasing

this is one of the first big measures so

getting into the number one here they're

going to be increasing the corporate

minimum tax to 15

on companies with at least 1 billion

dollars of revenue that's expected to

raise 313 billion dollars of tax revenue

until of course those companies find new

loopholes they're going to increase the

budget for the internal revenue service

something that is expected to raise 124

billion dollars by auditing more

americans

number three they're going to tax

carried interest if you know what that

is you know it's 14 billion or at least

they're expecting to raise 14 billion

dollars from that really this is for

like venture capitalists or syndications

or investment managers who manage other

people's money

they also did not include any kind of

changes to the salt tax deduction no

expansion here no taxes on stock

buybacks and no millionaire tax we did

however get a 369 billion dollar

investment that's proposed to lower

energy costs increase clean production

and reduce carbon emissions by 40 by

twenty thirty and what i've done because

i'm going to link at the bill down below

as i put little page numbers here so if

any at any part you get confused by some

of these uh don't worry it's not the

easiest thing to read i get confused too

so you can always fact check me by

looking at the bill directly

first i noticed that there are changes

in definition from qualified plug-in

electric drive motor to clean vehicles

which is really interesting because

presumably that includes hybrids as well

and not just like all electric vehicles

which in my opinion is kind of like the

legacy auto manufacturers kind of saying

like hey uh can we uh can we include all

the good old hybrids as well

uh who knows but anyway i thought that

was really interesting of course i

expect it will also include hydrogen

fuel cells and such we also see the

elimination of the limit of number of

vehicles eligible for the credit there

used to be a limit on like the first 200

000 vehicles that would be eligible for

the credit and then that eligibility

went away

that is being lifted by this bill to

qualify qualifying vehicles must have 40

percent of their battery either quote

extracted or processed in any country in

which the u.s has a free trade agreement

or is recycled in north america uh if

it's placed in service within these time

frames so basically in simple speak here

u.s mexico or canada produced vehicles

and batteries as long as 40 percent of

the battery is produced in the us canada

mexico or other free trade countries

in 2020 or by 2024 they qualify for the

credit 50

by 2020 or throughout 2024 60 throughout

2025 70 throughout 2026 in order to

qualify for this so it does sort of hark

into some domestic manufacturing

one credit per vin so unfortunately for

vehicle flippers and i kind of had a

little feeling myself to him like can i

just like buy and sell a bunch of these

and milk a bunch of these credits nope

one credit per vehicle vin number

vehicle identification number and for

individuals there is a

dollar 7500

as long as the vehicle matches this

description out here in terms of being

manufactured mostly in the united states

mexico or canada and you'll qualify for

seventy five hundred dollars as a tax

credit if your modified adjusted gross

income is under 300 000 for a joint

household 225 000 for a head of

household and 150 000

for single individuals there are limits

on the value of the vehicles as well the

limits do uh start at well the limits

are eighty thousand dollars a four

vans eighty thousand dollars for suvs

eighty thousand dollars for pickups and

fifty five thousand dollars for other

vehicles previously owned vehicles will

only qualify for four thousand dollars

or thirty percent whichever is lower

so for example a three thousand dollar

vehicle would only qualify for about

nine hundred dollars

used vehicles do need to be under twenty

five thousand dollars and weigh less

than 14 000 pounds

now this gets tricky the qualified

commercial clean vehicle part and it

gets tricky because there are a lot of

tesla fan boys and fan girls out there

who are like oh my gosh tesla semi

trucks are going to get a full 40 000

all right let's clear this up a little

bit okay

so here's what the law

says

you'll get a 30

credit on non-diesel and non-gas

commercial vehicles up to seventy five

hundred dollars if it's under fourteen

thousand dollars this or fourteen

thousand pounds this matches the

individuals seventy five hundred dollars

so both commercial and individuals get

that seventy five hundred dollars as

long as the vehicles qualify and they're

under fourteen thousand pounds but you

get forty thousand dollars if it's over

fourteen

thousand pounds

however these are actually the limits

the limit is seventy five hundred

dollars the limit is forty thousand

dollars

and the limit is based on the smaller

number of either

what you pay

or the incremental cost of the vehicle

which is the difference between what

you're buying and a comparable vehicle

with comparable use that's gas or diesel

let's give you an example

if a tesla semi truck costs two hundred

fifty thousand dollars

and a manned semi truck costs two

hundred thousand dollars

then you would get thirty percent on the

difference as long as they're deemed to

be comparable vehicles which i think it

would be a hard we would be hard-pressed

as tesla fan people to argue that you

know a semi-truck that's diesel is

somehow vastly different from the use of

a tesla semi truck right but anyway

you'd get 30 on the 50k

or 30 on 250k whichever is less which in

this case the lesser amount would be 15

dollars

to really get the full forty thousand

dollars the electric version would have

to cost a hundred twenty thousand

dollars more than the equivalent gas or

diesel version

also it's worth noting that clean diesel

and gas vehicles that are more expensive

than non-clean diesel and non-gas

vehicles will qualify for a 15 tax

credit as well which is very interesting

because that kind of means that gas and

diesel vehicles could be getting 15 as a

tax credit that was a little bit

complicated but hopefully that makes

sense you can rewind if it didn't

there's also up to a 100 000 credit for

uh basically installing ev charging

stations fueling stations which i

thought was interesting that'll last

through december 32 along with all these

other benefits that'll last all the way

up through december 30 2032

there's an extension of the geothermal

and solar credits through january 1 2025

which will be cheered by the solar

industry

then getting away from energy again we

do have the affordable care act

extension 64 billion investment medicare

being allowed to negotiate drug prices

which is expected to raise 288 billion

dollars

the senate parliamentarian does still

have to go through this and agree that

this bill belongs in the budget

reconciliation process she might end up

slicing pieces out of this and it will

require kirsten cinema being on board

and she says so far that she still has

to review the text regarding responses

so far mitch mcconnell has responded

saying that democrats have already

crushed american families with historic

inflation now they want to pile on giant

tax hikes that will hammer workers and

kill many thousands of american jobs

first they killed your family's budget

now they want to kill your job too well

folks there you have it the inflation

reduction act of 2022 thanks so much for

watching and we'll see in the next one