President Biden proposes to spend $2.3 trillion to refurbish U.S. infrastructure, which he defines to include care for children and the elderly and affordable housing, among an expanded concept of economic infrastructure detailed in his plan.
The plan would spend the money over eight years and be paid for over 15 years by raising corporations’ domestic tax rates from the current 21 percent to 28 and hiking levies on companies’ foreign earnings from 10.5 percent to 21 percent.
The G20 group of nations is considering a Biden administration proposal, led by treasury secretary Janet Yellin, to adopt a 21-percent global minimum corporate income tax to prevent countries from trying to lure businesses by undercutting each other’s tax rates.
Biden’s plan does not include tax increases on households.
“I’m open to other ideas” for financing the plan “so long as they don’t impose any tax increase on people making less than $400,000,” Biden said in announcing his proposal.
Among the particulars of what Biden called “a once-in-a-generation investment in America”:
- $115 billion to build or repair highways, roads, and bridges;
- $85 billion to strengthen public transit;
- $100 billion to expand access to high-speed broadband;
- $100 billion to improve the electric power grid;
- $100 billion to upgrade public schools;
- $102 billion to strengthen the domestic manufacturing base;
- $50 billion to expand the U.S. semiconductor industry;
- $80 billion for railway improvements and expansion;
- $40 billion to retrain workers whose jobs have become antiquated;
- $30 billion to prepare for the next pandemic;
- $25 billion for airports.
The plan also calls for $400 billion to strengthen the system of care for children, the elderly, and people with disabilities; $174 billion for electric vehicle development; and $46 billion to expand green energy markets and technologies.
Biden’s plan has been attacked by some Congressional Democrats as doing too little to address climate change. Others in his party have said they will not support the plan unless it re-establishes federal tax deductions for state and local taxes, eliminated in Republicans’ 2017 tax cuts.
Ron Wyden, chair of the Senate finance committee, has said he is crafting his proposal to revamp tax rates on corporations’ foreign income.
Mitch McConnell, leader of Senate Republicans, has attacked the proposal as “a Trojan horse for a massive tax increase,” a Democratic Party wish list and pledged that no Senate Republican would support any version of the proposal brought up in the chamber for a vote.
Biden’s next proposal, scheduled to be announced this month, will focus on child care, education, and health care and is expected to carry a price tag of between $3 trillion and $4 trillion.
TREND FORECAST: With only some $220 billion going directly toward infrastructure repairs out to the $2 trillion being spent, it is an outright lie to label this an infrastructure program.
It should be noted that according to the American Society of Civil Engineers (ASCE), it will take $4.59 trillion to improve the nation’s infrastructure. The ASCE gave the U.S.’s infrastructure an overall grade of D+. Thus, the so-called infrastructure program will do next to nothing to improve the U.S. infrastructure.
And, as we have noted, compared to the U.S.’s third-world rail system and its rotting roads, China has greatly improved and modernized its infrastructure. And rather than pumping money into equity markets and big business during the COVID War, Beijing put its money into infrastructure improvements.
Also, when Donald Trump ran for president in 2016, his main pledges were to reduce taxes, build the wall to stop immigrants from flooding into the U.S., and rebuild the nation’s rotting infrastructure.
The only promise he kept was to lower taxes… for the richest Americans. According to the Tax Policy Center, the 1 percent got almost 83 percent of the benefits from Trump’s 2017 tax bill.
As we have detailed, rather than investing in capital expenditures, the mega-companies spent nearly $1 trillion of their tax breaks on stock buybacks… which, in turn, pushed the value of their equities higher.