President Joe Biden on Wednesday announced a corporate tax increase that will provide funding for his $2 trillion infrastructure plan over the next 8 years.
The so-called “American Jobs Plan” pushes the corporate tax rate from the 21% established by former President Donald Trump to a whopping 28% and incentivizes companies to remain in the US by setting a 21% global minimum tax. The initiative also blocks companies from merging with foreign businesses to avoid taxation.
President Biden’s infrastructure plan is “about making an investment in America – not just modernizing our roads or railways or bridges but building an infrastructure of the future,” said White House Press Secretary Jen Psaki.
A majority of the $2 trillion will go towards:
- Improving roads, bridges, and public transit
- Upgrading the power grid to deliver clean electricity
- Retrofitting homes, schools, hospitals, and other major facilities
- Constructing a national network EV stations
- Replacing lead water pipes
- Upgrading sewer systems
- Expanding broadband Internet
“I’m convinced that if we act now, that in 50 years, people will look back and say this was when America won the future,” said Biden, claiming the plan would be fully paid for in 15 years.
White House officials say the proposal will create millions of “good-paying union jobs” as the nation moves away from fossil fuel and ups the fight against Chinese manufacturing. Opponents worry about the implications of tax increases and lost jobs during a time of economic uncertainty.
“It seems like President Biden has an insatiable appetite to spend more money and raise people’s taxes,” argues Rep. Steve Scalise (R-LA).
“We need to be careful not to do anything that’s too big or too much in the middle of a pandemic and an economic crisis,” warns Rep. Josh Gottheimer (D-NJ). “It’s got to be responsible and both parties need to be at the table. This can’t just be jammed through without input and consideration from the other side.”
Biden is expected to unveil a second proposal in April – also valued at $2 trillion – that will fund domestic policy objectives including:
- Increased investment in child care and tax credits
- Universal pre-kindergarten
- Expanded affordable healthcare for the elderly and disabled
- Housing infrastructure
- Tuition-free community college
- Increased pay for care workers
The second initiative, which includes massive investments for R&D in technology and climate science, will be paid for by increased taxes on Americans earning more than $400,000 per year.
“Put simply, these are investments we have to make,” said Biden. “Put another way, we can’t afford not to.”
Author’s Note: We have been expecting Biden to implement a tax increase, and here it is. Unfortunately when you increase taxes on a corporation, the corporation increases prices for the consumer. There is no such thing as a ‘corporate tax hike.’