Biden Unveils $2 Trillion American Jobs Infrastructure Plan, Along With Made in America Tax plan
President Biden unveiled his $2 trillion American Jobs Plan today, a sweeping infrastructure bill which, along with his Made in America corporate tax plan, “will be fully paid for within the next 15 years and reduce deficits in the years after,” he said.
This plan follows the $1.9 trillion American Rescue Plan signed into law earlier this month.
“While the American Rescue Plan is changing the course of the pandemic and delivering relief for working families, this is no time to build back to the way things were,” Biden said in a statement on the White House website. “This is the moment to reimagine and rebuild a new economy. The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China. Public domestic investment as a share of the economy has fallen by more than 40 percent since the 1960s. The American Jobs Plan will invest in America in a way we have not invested since we built the interstate highways and won the Space Race.”
$621 billion toward building “world class” transportation infrastructure.
A key element of the plan includes fixing highways and bridges and upgrading ports, airports and transit systems.
The plan calls for a $174 billion investment to win the electric vehicle market by enabling automakers to spur domestic supply chains from raw materials to parts, retool factories to compete globally and support American workers to make batteries and EVs.
It will also give consumers tax incentives to buy American-made EVs and establish grant and incentive programs for state and local governments and the private sector to build a national network of 500,000 EV chargers by 2030.
Rebuild clean drinking water infrastructure, a renewed electric grid and high-speed broadband to all Americans.
This includes $111 billion toward replacing 100% of the country’s lead pipes and upgrading America’s drinking water, wastewater and storm water systems, as well as supporting clean water infrastructure across rural America.
In addition, $100 billion would go toward building high-speed broadband infrastructure to reach 100% internet coverage, and $10 billion would go to mobilizing the next generation of conservation and resilience workers.
Build, preserve and retrofit homes, schools and commercial and government buildings.
Biden’s plan includes investments in homes and commercial buildings to address the affordable housing crisis. It would also modernize schools and upgrade Veterans Affairs facilities and federal buildings.
The plan would invest $213 billion to produce, preserve and retrofit more than two million affordable and sustainable places to live. In addition, Biden is calling on Congress to pass the bipartisan Neighborhood Homes Investment Act. “Offering $20 billion worth of NHIA tax credits over the next five years will result in approximately 500,000 homes built or rehabilitated, creating a pathway for more families to buy a home and start building wealth,” Biden said in the statement.
In addition, $40 billion would go to improve the infrastructure of the public housing system, $100 billion to upgrade and build new public schools and $18 billion for the modernization of VA hospitals and clinics.
Solidify the infrastructure of the “care economy.”
This segment includes $400 billion toward expanding access to quality, affordable home- or community-based care for aging relatives and people with disabilities.
Invest in R&D, revitalize manufacturing and train Americans for the jobs of the future.
This would include $180 to advance U.S. leadership in new technologies, from artificial intelligence to biotechnology to computing. Also:
- $35 billion toward solutions to address the climate crisis
- $15 billion to eliminate racial and gender inequities in research and development and science, technology, engineering and math by creating up to 200 centers of excellence to serve as research incubators
- $300 billion to strengthen manufacturing supply chains for critical goods to protect Americans from future pandemics
- $46 billion for jumpstarting clean energy manufacturing and partnering with rural and tribal communities to create jobs and economic growth in rural America
In addition, Biden unveiled the Made in America Tax Plan, which would “fix the corporate tax code so that it incentivizes job creation and investment here in the United States, stops unfair and wasteful profit shifting to tax havens, and ensures that large corporations are paying their fair share.”
Specifically, this would translate into setting the corporate tax rate at 28% and strengthening the global minimum tax for U.S. multinational corporations by increasing the minimum tax on U.S. corporations to 21% and calculating it on a country-by-country basis so it hits profits in tax havens.
Tom Wheelwright, CPA and author of “Tax-Free Wealth,” tells GOBankingRates that, “Raising the federal tax rate on corporations to 28% means that many U.S. companies will be subject to tax at 33%-37%, since there are also state income taxes. This would put U.S. companies at a disadvantage vis-à-vis the rest of the world that has tax rates closer to 30%. A smaller raise in corporate tax rates, say to 23% or 24%, would be much better.”
The plan will also eliminate the rule that allows U.S. companies to pay zero taxes on the first 10% of return when they locate investments in foreign countries. “By creating incentives for investment here in the United States, we can reward companies that help to grow the U.S. economy and create a more level playing field between domestic companies and multinationals,” the plan says.
In addition, the plan will enact a 15% minimum tax on large corporations’ book income and eliminate tax preferences for fossil fuels, as well as make sure polluting industries pay for environmental cleanup. Finally, the plan aims to ramp up enforcement to make it harder for corporations to avoid or evade taxes.
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