WASHINGTON – President Biden will unveil a $ 2 trillion infrastructure plan that will focus on repairing roads and bridges, expanding broadband Internet access, and increasing research and development funding proposes expansive corporate tax hike for the package.
Mr Biden will present the proposal during a speech on Wednesday afternoon in Pittsburgh, where he launched his presidential campaign. He is expected to argue that the investment is necessary to help the US compete with China and tackle climate change.
The action that will be taken after Mr Biden passed a law to exonerate Signed $ 1.9 trillion in coronavirus is the first of a two-part economic plan the president plans to lead through Congress in the coming months. A second plan, focusing on childcare, health care and education, will be released in April. The presidential advisers said the Covid-19 pandemic had changed the US stance on the role the government should play in their lives and created political space for one-off federal investments that could transform the country > However, the measure faces clear obstacles. Among other things: Republican opposition to substantial tax hikes, moderate Democrats concerns about high spending, and progressives excitement that Mr Biden’s plan is not ambitious enough.
The White House said the proposal would last over an eight year period Would cost $ 2 trillion and be paid over a 15 year period by raising the corporate tax rate from 21% to 28% and increasing taxes on companies’ overseas profits. The tax changes would revise or replace much of the international tax structure that Congress established four years ago in the law signed by then President Donald Trump.
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Mr Biden’s proposal includes $ 621 billion to modernize transportation infrastructure, $ 400 billion to care for the elderly and people with disabilities, and $ 300 billion to support manufacturing, $ 213 billion to upgrade and build affordable housing, and $ 100 billion to expand broadband, other investments.
The plan is to upgrade 20,000 miles of carriageway. Construction of 500,000 charging stations for electric vehicles; Replacing the country’s existing lead pipes and service lines; Repairing aging schools; Expansion of home care for the elderly and disabled; and invest billions of dollars in local semiconductor manufacturing. Mr Biden also suggests setting a standard requiring more and more parts of the country’s electricity to be generated from low-carbon sources, with the aim of eliminating carbon emissions from the electricity grid by 2035. The proposal requires Congress approval.
Mr Biden’s plan also emphasizes equity in access to jobs and transportation, including $ 20 billion for a new program to reconnect neighborhoods cut off by previous transportation investments, as well Research grants for historically black colleges and universities. The plan provides for a national laboratory to be attached to an HBCU focused on climate.
A senior administrator said the nature of the spending set out in the proposal has generated bipartisan interest in the past, adding that President is open to other ideas on how to structure and pay for the plan.
Republicans and Democrats have struggled in recent years to pass major infrastructure bills while arguing over how much to spend and how to fund it. And Republicans are particularly unlikely to approve a reversal of the 2017 tax bill, which they enthusiastically supported.
« They want to do another massive expense calculation that includes additional debt and big tax increases, by the way. »
« They want to do another massive spending bill that includes additional debt and big tax hikes by the way, » Senate minority chair Mitch McConnell (R., Ky.) said at a local event Tuesday. “I think this new democratic government is going in the wrong direction. The economy will get better on its own. “
Senator Kevin Cramer
(R., ND) said he was open to working with Democrats on certain measures like expanding the Highway Trust Fund or easing regulations to reduce the cost of transportation projects, but added that Mr Biden’s proposal was about that go beyond pure infrastructure.
« I worry that by using one of the most bipartisan guidelines in Congress as a tool for much more partisan goals like climate and taxation, President Biden will be wasting any remaining goodwill he has towards Republicans, » Cramer said. Taken together, Mr Biden’s economic proposals are expected to cost between $ 3 and 4 trillion in a decade, according to those involved in the discussions. It is not known how much of the second package is paid for through tax increases, but White House officials are weighing additional proposals.
The first package contains corporate tax proposals and none of Mr Biden’s main campaign proposals to increase taxes on individual income , the capital gains, estates, and non-corporate businesses of the top earners.
According to the President’s plan, the corporate tax rate would rise from 21% to 28%, halfway between the old 35% tax rate and the Republican level in 2017. This would push the U.S. corporate tax rate back to the top of the pack among major economies, and corporate groups are already warning the changes would discourage investment.
« Policy makers should avoid creating new barriers to job creation and economic growth, especially during the boom, » said Joshua Bolten, president and chief executive officer of the Business Roundtable, on Tuesday > Democrats claim that the 2017 Tax Act cuts taxes too low and contains several features that encourage businesses to take profits and operations overseas. The Biden Plan would reverse some of these.
Specifically, the plan would set the minimum tax on foreign income for U.S. corporations from 10.5% today to 21% and set that tax to be earned for those in each country Profit applies instead of companies combining their revenues globally. Administrative officials said this would limit companies’ ability to book profits in tax havens, while warning companies of complexity and unforeseen consequences.
The plan would also prevent companies from excluding 10% of their overseas assets from the minimum tax base although there is little evidence that this feature of the current system has led companies to move assets overseas. Corporations often have factories and other operations outside of the United States to serve overseas markets, and the 2017 minimum tax is designed to generate profits from highly mobile intangibles such as patents.
Mr Biden would also have one created in 2017 law Abolish Tax Withholding, which allows US companies to pay a lower tax rate on domestic profits from serving foreign markets, and replace it with other research and development incentives. The companies that reported the withdrawal include:
General Dynamics Corp.
The plan would also change US taxation on US activities of foreign companies to prevent them from shifting their US profits to low-tax areas. In addition, the plan would impose a minimum tax of 15% on corporate income as reported in the financial statements. Depending on how this provision is written, such a tax could effectively reclaim other tax breaks.
White House staff said the proposal was paid for, but not the way Congress normally measures such things. It would take 15 years for the corporate tax increases to cover one-off infrastructure costs over an eight-year period, although the tax increases would persist after that point.
Mr Biden’s advisors hope that Congress will make significant progress by Memorial Day on infrastructure legislation and pass it this summer, and they said they wanted to work with Republicans to find common ground.
Some of Mr Biden’s advisors and Congressional Democrats are considering how to budget maneuver to reduce the Republican-free measure Implementing support – as was the case with the Covid-19 aid package – where almost every Democrat would have to stick together.
Sticking the party together could prove complicated, as both moderate and progressive lawmakers jockeys their favorite topics in the Address the bill.
The MPs Tom S uozzi (D., NY), Bill Pascrell (D., NJ), and Josh Gottheimer (D., NJ) said this week they will not support any tax code changes unless Congress makes the deduction for state and Local authorities restore taxes capped at $ 10,000 under the 2017 Republican Tax Act signed by Mr. Trump. Democrats control House 219-211 so they can’t currently lose more than three votes for laws that all Republicans will oppose.
At the same time, progressives signaled that the $ 2 trillion proposal was not up to par responded to the country’s challenges, including climate change. « That is nowhere near enough, » Rep. Alexandria Ocasio-Cortez (D., N.Y.) wrote on Twitter Tuesday night in response to news reports about the package, adding, « Must be a lot bigger. »
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