Bill Overview
Title: Rare Earth Magnet Manufacturing Production Tax Credit Act of 2022
Description: This bill allows a new tax credit for the domestic production of rare earth magnets manufactured in the ordinary course of a taxpayer's trade or business. The bill defines rare earth magnet as a permanent magnet comprised of (1) an alloy of neodymium, iron, and boron, which may also include praseodymium, terbium, or dysprosium; or (2) an alloy of samarium and cobalt, which may also include gadolinium or any associated host mineral of a component rare earth material.
Sponsors: Sen. Cortez Masto, Catherine [D-NV]
Target Audience
Population: People involved in or reliant on rare earth magnet manufacturing and industries using such magnets
Estimated Size: 500000
- The bill targets the manufacturing sector, specifically those involved in the production of rare earth magnets in the United States.
- It is likely that companies involved in the production and supply chain of these magnets will benefit from the tax credit, as it provides financial incentives to manufacture domestically.
- The use of rare earth magnets is common in various industries, including electronics, automotive, and clean energy technology, impacting these sectors indirectly through changes in supply chain costs.
- Workers in the rare earth magnet manufacturing industry might experience job security or increased wages due to potential growth in domestic production.
Reasoning
- This policy primarily impacts the manufacturing sector, especially companies producing rare earth magnets and associated supply chains.
- The direct impact is on companies able to leverage the tax credit, thus potentially increasing production efficiency and reducing costs.
- Indirectly affected are workers in manufacturing, who may see increased job security or wages as companies grow.
- The broader economic environment within sectors such as automotive and electronics, which use these magnets, may see cost changes in supply chains, affecting pricing and market dynamics.
- Not everyone involved in these industries will be equally affected, as the distribution of benefits will vary based on proximity to manufacturing activities and the ability for companies to capitalize on tax credits.
- The population impacted is estimated around 500,000 in the US, relating to both direct and indirect economic activities surrounding rare earth magnet manufacturing.
Simulated Interviews
Automotive Engineer (Detroit, Michigan)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The tax credit could help us reduce costs in component production.
- Hopefully, this leads to increased innovation and lower prices for consumers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Supply Chain Manager (San Jose, California)
Age: 30 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- The policies seem promising but their actual impact on my job depends on how the supply chain adjusts.
- Margins might improve if domestic production stabilizes costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Factory Worker (Birmingham, Alabama)
Age: 55 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- I welcome any policy that keeps jobs like mine here in the US.
- It may mean better job security and possibly higher wages.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 4 |
Renewable Energy Scientist (Houston, Texas)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- More domestic production could mean better access to materials for research.
- I'm optimistic about the long-term benefits to my field.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Steelworker (Pittsburgh, Pennsylvania)
Age: 42 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I don't see how this policy affects me directly, but anything that boosts manufacturing is good.
- Perhaps there are new opportunities if connected industries grow.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Graduate Student (Rochester, New York)
Age: 24 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- This is quite exciting for research opportunities in material sciences.
- Domestic manufacturing boosts confidence in the future of my studies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Financial Analyst (Phoenix, Arizona)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- If firms utilize these tax credits effectively, we might see a boost in tech stocks.
- The long-term impacts really depend on broader economic trends.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Small Business Owner (Chicago, Illinois)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Tax incentives really help small businesses like mine stay competitive.
- It could allow us to invest in new technologies and expand.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Electronics Retail Manager (New York, New York)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- Lower production costs might mean better prices for my inventory.
- Interested to see how this influences consumer demand.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Policy Analyst (Raleigh, North Carolina)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- This policy should strengthen domestic manufacturing sectors in the US.
- It's a positive move towards reducing external dependencies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Cost Estimates
Year 1: $400000000 (Low: $350000000, High: $450000000)
Year 2: $420000000 (Low: $370000000, High: $460000000)
Year 3: $440000000 (Low: $390000000, High: $480000000)
Year 5: $480000000 (Low: $430000000, High: $530000000)
Year 10: $540000000 (Low: $490000000, High: $590000000)
Year 100: $500000000 (Low: $450000000, High: $550000000)
Key Considerations
- The bill aims to reduce dependency on foreign imports by promoting domestic manufacturing of rare earth magnets.
- Tax incentives may create short-term revenue losses but promote long-term gains in production capacity.
- Impact on employment, particularly within industries relying on rare earth magnets, could be significant.