Biden's Infrastructure Plan

johnlocke

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Biden’s Infrastructure Plan: Where the Money Is Going​

The $2.3 trillion proposal includes spending on bridges, roads, mass transit and water infrastructure​



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Roughly $620 billion of the proposal goes toward surface transportation like highways, rail and roads.​

PHOTO: JIM LO SCALZO/EPA/SHUTTERSTOCK
By
Andrew Duehren
Updated March 31, 2021 8:35 pm ET


The White House rolled out a $2.3 trillion plan that makes major investments in the nation’s infrastructure, along with a series of tax increases on corporations. President Biden detailed the proposal in a speech in Pittsburgh on Wednesday afternoon.
The broad outline now goes to Capitol Hill. Republicans have indicated that they would be opposed to a large package accompanied by tax increases, meaning Democrats will likely need to leverage their slim majorities in Congress to pass it along party lines.

What is in Biden’s infrastructure plan?

Much of the money in the plan goes toward upgrading roads, bridges and other parts of the nation’s infrastructure. But it also provides for large chunks of funding in other areas like caring for elderly and disabled Americans. It includes hundreds of billions in investments in manufacturing, workforce development and research and development.

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Much of the money in the plan goes toward upgrading roads, bridges and other parts of the nation’s infrastructure.​

PHOTO: GENE J. PUSKAR/ASSOCIATED PRESS
Does it raise taxes?

Yes. Along with the spending, the White House has proposed a number of tax increases, including raising the corporate tax rate to 28% from 21% and tightening a series of international tax rules. White House officials have said the tax increases would, over 15 years, cover the cost of the package.

The plan doesn’t call for increases on individual income taxes, though the White House is looking at increasing the top marginal income-tax rate and raising taxes on capital gains in future legislation. Increasing the gas tax, an idea often raised as a way to finance infrastructure spending, also isn’t in the plan.
What does the plan do for transportation?

Roughly $620 billion of the proposal goes toward surface transportation like highways, rail and roads. The funding would modernize 20,000 miles of road and fix hundreds of bridges across the country, according to the White House.

Of that money, $85 billion would go toward mass-transit systems, while $80 billion is set aside for addressing Amtrak’s repair backlog.
The plan would also spend $25 billion on airports and $17 billion on ports, waterways and ferries.

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Of the funds for surface transportation, $85 billion would go toward mass-transit systems.​

PHOTO: MIKE BLAKE/REUTERS

What about other types of infrastructure?

The White House proposal also includes major funding sources for other types of infrastructure. In the plan, $111 billion is geared toward water infrastructure, with the goal of replacing all of the lead pipes in the country, and $100 billion is aimed at expanding broadband internet access, particularly in rural communities.

How does the plan address climate change, electric vehicles and carbon emissions?
The White House and Democrats view the bill as their marquee effort to address climate change, and several provisions are aimed at reducing carbon emissions in the U.S.
The plan invests $174 billion in electric vehicles, offering tax incentives to consumers to buy the vehicles and proposing new grant and incentive programs to build 500,000 electrical-vehicle chargers by 2030. It also calls for shifting the federal fleet, including the Postal Service, to fully electric vehicles, and mandating that federal buildings only use clean energy sources.

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The plan includes incentive programs to build 500,000 electrical-vehicle chargers by 2030.​

PHOTO: STEVE HELBER/ASSOCIATED PRESS

For the electrical grid, the plan calls for $100 billion in new investments, incentivizing the construction of higher voltage capacity lines, and the expansion of tax credits for producing clean energy. The plan also proposes the creation of a national electricity standard that would move the U.S. to carbon-free electricity by 2035.
More than $200 billion in funding goes toward housing, with the goal of building and retrofitting more than one million homes and making them more energy efficient. The plan would also invest $40 billion in existing public housing.

What else does Biden’s plan spend money on?

The plan provides $400 billion for expanding access to care for elderly people and disabled people, calling for an expansion of Medicaid to cover long-term care services. More than $100 billion would fund workforce development programs, including a new program to train workers to find work in the clean energy, manufacturing and caregiving industries.

The White House also wants to send $100 billion toward upgrading and building new public schools.
What does the plan do for manufacturing and research and development?

With the proposal, the White House is asking Congress to provide $180 billion in new funding for research and development efforts. The administration wants to see money poured into research on semiconductors and advanced computing, along with ideas that spur job creation in rural areas and fight climate change.
For domestic manufacturing, the plan offers $300 billion to make investments seeking to mitigate the damage from future pandemics, bolster the production of semiconductors and support domestic manufacturers.

How does the plan address labor and workforce issues?

Many of the investments come with the stipulation that the workers on projects in the plan earn a high wage and receive labor protections. The White House also included in the plan legislation that would establish penalties on employers who violate the National Labor Relations Act and make it easier for gig workers to form unions.
 

Providence Colt

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Infrastructure spending was one thing that Trump was (seemingly) in favor of and I was hopeful would happen.

I don’t care which President gets it done, but I’m in favor of fixing what needs to be fixed in this country.
 

patswin

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Infrastructure spending was one thing that Trump was (seemingly) in favor of and I was hopeful would happen.

I don’t care which President gets it done, but I’m in favor of fixing what needs to be fixed in this country.
I couldn't agree more and I appreciate that you noted that Trump had advocated for this.
The devil is in the details and understanding how much of an infrastructure package goes to infrastructure, and how much of it is unrelated pork, i.e. like a "covid relief bill" that is largely stuffed with unrelated spending.
Based on the last two massive stimulus bills that have been passed, I think it's a reasonable concern.
 
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johnlocke

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Progressive Democrats have also criticized the size and scope of the proposal, arguing that it doesn't go far enough in addressing climate change or other issues.

"This is not nearly enough," Rep. Alexandria Ocasio-Cortez, D-N.Y., tweeted on Tuesday. "The important context here is that it’s $2.25T spread out over 10 years."
 
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johnlocke

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AkPatsFan

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Since this thread was started on April 1st I thought it was an April Fools joke, it still can be right? :ROFLMAO:
 
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What’s in Biden’s $2 Trillion Corporate Tax Plan​

Companies would face higher taxes on domestic and foreign income​



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President Biden spoke in Washington last month.​

PHOTO: EVAN VUCCI/ASSOCIATED PRESS
By
Richard Rubin
Updated April 8, 2021 4:53 pm ET


WASHINGTON—President Biden is calling for $2 trillion in corporate tax increases over 15 years to pay for his infrastructure plan. Here are the basics of the revenue-raising side of the plan, which reverses many of the changes from the 2017 tax law written and passed by Republicans.
The proposals released at the end of March hew closely to Mr. Biden’s campaign tax plan. But they don’t include his proposals affecting taxes on high-income individuals’ income, capital gains, estates and noncorporate businesses. Those are expected in a future segment of the president’s agenda.

How big is the tax increase?​

Not counting the Biden plan, corporate taxes are projected to be 1.3% of gross domestic product over the next decade, according to the Congressional Budget Office. This plan would add 0.5 percentage points of GDP, according to the administration.

What happens to the corporate tax rate?​

It would go up to 28% from 21%. That is still lower than the 35% that existed before the 2017 law, but it would put the U.S. back toward the top of the pack among major economies.


Two Issues That Complicate Biden’s Big Infrastructure Plan

Two Issues That Complicate Biden’s Big Infrastructure Plan
Democrats and Republicans are both interested in spending money on the nation’s infrastructure. But the two sides don’t see eye to eye on what that plan should be and how to pay for it. WSJ’s Gerald F. Seib explains. Photo illustration: Emma Scott

Why does the corporate tax matter?​

Higher tax rates reduce the return on investment, so business groups say companies might be less likely to build factories or make other investments in the U.S. Some projects that make sense at a 21% tax rate won’t make sense at a 28% rate.

Did the 2017 corporate-tax cut encourage investment and boost the U.S. economy?​

The evidence is mixed. Many companies used the proceeds to buy back stock and boost returns to investors. There was also a modest boost in business investment after the law passed. Republicans credit the tax cuts and other Trump-era policies for the decline in unemployment and increase in wages that happened before the coronavirus pandemic.

Who pays the corporate tax?​

That’s a hotly debated question among economists. Many, including those at the congressional Joint Committee on Taxation, say most of the burden falls on the owners of capital, such as corporate shareholders. That can get reflected in stock prices. Some of the burden gets passed on to the public at large. That can either happen through lower wages or higher prices than would otherwise be the case.
Those workers and shareholders include some people making under $400,000, the threshold below which Mr. Biden has promised no tax increases; Biden aides said during the campaign that that pledge applies to direct tax increases, not indirect ones like this.

What does the plan mean for U.S. companies operating abroad?​

The 2017 law created a minimum tax on foreign profits of U.S. companies. Those paying nothing abroad pay a 10.5% minimum tax to the U.S. The Biden plan would raise that 10.5% minimum to 21%, though that would still be lower than the 28% rate on domestic profits.
The Biden administration is urging other countries to cooperate with it in setting a global minimum corporate tax rate. Without such an agreement, non-U.S. based companies could have an advantage over U.S.-based firms.

Mr. Biden would also require companies to calculate that tax on a country-by-country basis. And it would change a provision that lets companies exclude 10% of their tangible foreign assets from the calculation of the base of the minimum tax. That provision, Democrats argue, provides an incentive to put factories abroad, but there is little evidence that companies have actually made decisions based on that provision.

What is the rationale for the tax changes on international income?​

Democrats argue that the existing system gives companies an incentive to shift jobs and operations abroad. Companies—particularly those producing heavy equipment or consumer goods—say they generally have foreign operations to serve foreign markets.
The minimum tax was designed to be high enough to limit the benefits of booking profits abroad, but low enough so that U.S. companies didn’t face too large a burden in competing against foreign-headquartered companies that don’t have similar taxes in their home countries. Companies and Republicans have warned that higher taxes on U.S.-based companies could make them takeover targets for foreign-led firms that wouldn’t face those taxes.

Are these changes to taxes affecting foreign-headquartered companies?​

Yes. The plan would alter or repeal the Base Erosion and Anti-Abuse Tax created in 2017. That tax was designed to prevent foreign companies from loading up their U.S. operations with deductions and pushing profits to their low-tax headquarters countries.
The Biden plan would change that tax so that companies are limited from shifting income to a country that lacks a minimum tax. That new tax—called Shield by the administration—acts as a threat to other countries, a warning that their companies face consequences if they don’t adopt minimum taxes.

What about incentives for domestic operations?​

The 2017 law created a special deduction for companies that serve foreign markets from the U.S., and it effectively lets companies pay about a 13% tax rate on that income. The Biden plan would repeal that tax break and use the revenue to pay for incentives for research and development.

Is there a minimum tax?​

On top of all the other proposals, the Biden plan imposes a 15% tax on the financial-statement income of companies if they don’t otherwise pay that much. That is designed as a backstop and a reaction to reports about companies paying little or no tax.

What are the potential problems with that minimum tax?​

Depending on how it is designed, such a minimum tax could undercut tax incentives that Congress created, such as credits for renewable energy or research. It would also leave crucial tax decisions to accounting regulators who set the rules for financial-statement income, as opposed to Congress and the Internal Revenue Service.
 
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