BIDEN PASSES CHIP ACT TO COUNTER CHINA
November 9, 2022 - Douglas Myser
Biden passes chip act to counter china. The Biden Administration, joined by a large majority of Congress, passed the Chips and Science Act. The Act is designed to counter the influence of China, and to make the United States secure in Computer Chip manufacturing in the event of a Chinese invasion of Taiwan and the destruction of the largest chip manufacturing plant, which is in Taiwan. Without that plant, or a robust alternative, the United States economy would be brought to its knees. The Act gives a generous 25% manufacturing credit to a qualified business investing in a year where it puts money into a semiconductor manufacturing plant. The plant must first and foremost be used for the manufacturing and or design or computer chips and components. As part of the Act, Congress felt the urgency given the Chinese reversal in Hong King, and the promises that were reversed there years ago. Biden passes chip act to counter china.
The measure was passed when it seemed the Democrats in the Senate were gaining some momentum, as they had passed the budget reconciliation bill, which placed a minimum 15% corporate tax on C Corporations, which will raise nearly $320 billion in additional revenue. Senator Joe Manchin was behind the bill and it looked like it was going to get passed. One part of the bill involved carried interest and also made a longer holding period for long term capital gains. The three year current capital gains would be changed to a five year holding pattern. The bill also included a massive injection of nearly $88 billion for funding the new more aggressive IRS, in an effort to bolster collections, estimated to increase revenue by $124 to $250 billion a year. The IRS has been asking for additional funds for the last decade, and will finally be able to fund every project to get them back up to par.