A look at recently passed legislation
ECONOMIC VIEWS BRIEF
Russell Price, CFA | Chief Economist – Ameriprise Financial
August 23, 2022
- The CHIPS and Sciences Act looks to narrow a key U.S. long-term vulnerability – the country’s heavy reliance on foreign sources for critical semiconductors.
- The Inflation Reduction Act combines direct government spending with tax incentives to advance the transition to greener energy generation.
- In the years ahead, the Inflation Reduction Act also offers prescription drug reform to Medicare participants and institutes some new corporate taxes
Two important pieces of legislation were recently passed into law. The CHIPs Act allocates billions in federal dollars and tax incentives to domestically manufacture critical semiconductors, thus narrowing a major strategic vulnerability. The Inflation Reduction Act (IRA) is much larger and focuses on climate remediation, healthcare costs, and levies some new corporate taxes.
Though each address very important long-term issues, we do not see either as having a material influence on near-term investment opportunities.
In this report, we provide a high-level overview of each piece of legislation.