cnbc.com/2022/08/07/cramer-the-inflation-reduction-act-is-a-tax-on-companies-shareholders.html
SOWOA is the Spend Our Way to Oblivion Act, or SOWOA, as it's called by John Ellis, who runs the brilliant News Items newsletter. The bill is positively Orwellian. I am a huge fan of George Orwell, and while he really only gave us "1984" as an explanation for 2022, you might as well go read "Homage to Catalonia"

On the surface, it is disastrous for many U.S. stocks. I say that because this is truly a bill of favors and of revenge, a bill against whatever the Republicans believe in. It's as if there really is only one party and this one party is desperate to spend money.

A tax on buybacks that truly does impact the way companies will address their capital, a 15% book tax which hurts companies with net operating losses and may have them raise capital, the Medicare negotiation with drug companies over price, plus all sorts of suspicious gifts to interests that are against the oil and gas lobby. The market was taking care of many of the provisions against the energy companies.

Gifts to electric vehicle makers were extended and there is an actual battery production credit for U.S. companies that will help Ford (F) and General Motors (GM). Watch that one, Ford wants it badly. Farmers got the usual gifts—this time methane, which is actually a subsidy for oil companies that sell methane like Chevron.

The bill will most likely cause the S & P to fall. Will it cause the drug stocks to get clocked? The drug companies have always felt this Medicare gift was inviolate. It would have been better to say it's a tax on companies and their shareholders.
Posted by WA wagmi
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