President Joe Biden’s campaign promise to hike taxes on corporations and the wealthy received an unexpected boost, according to a new Reuters report.

On Wednesday, Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) reached a deal on a wide-ranging financial package that includes $430 billion in new spending on energy, electric vehicle tax credits, and health insurance investments. The agreement, called the Inflation Reduction Act of 2022, is seen as a compromise that includes elements of Biden’s contentious Build Back Better initiative.

According to Schumer and Manchin, the bill pays for itself by raising minimum taxes on large companies and enforcing existing tax laws. Reuters reported that the proposed legislation would impose a 15 percent minimum tax on corporations with profits of more than $1 billion. That would raise $313 billion over the next decade.

The bill also aims to close the so-called carried interest loophole, which has long been a goal of Democratic tax reformers. It is a longstanding tax break that enables many private equity and hedge fund financiers to pay a lower capital gains tax rate on much of their income, instead of the higher income tax rate paid by wage earners. Schumer and Manchin say eliminating that loophole would bring in another $14 billion.

In a statement on Wednesday, Biden praised the new bill by saying that it “will create thousands of new jobs and help lower energy costs in the future.”

“This bill will reduce the deficit beyond the record setting $1.7 trillion in deficit reduction we have already achieved this year, which will help fight inflation as well.  And we will pay for all of this by requiring big corporations to pay their fair share of taxes, with no tax increases at all for families making under $400,000 a year,” he continued.

“This is the action the American people have been waiting for. This addresses the problems of today—high health care costs and overall inflation—as well as investments in our energy security for the future,” he added.

On Thursday, per CNN, Biden urged Democrats in Congress to quickly pass the legislation.

“This bill is far from perfect. It's a compromise. But it's often how progress is made, by compromises. The fact is that my message to Congress is this: This is the strongest bill you can pass to lower inflation, cut the deficit, reduce health care costs, tackle the climate crises and promote energy security—all the time while reducing the burdens facing working-class and middle-class families,” Biden said during a speech at the White House.

“So, pass it. Pass it for the American people. Pass it for America,” he concluded.

The Senate is expected to vote on the proposed legislation next week, after which it will head to the Democratic-controlled House of Representatives.

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.