Paying for the Plan
The Biden administration introduced a $2 trillion infrastructure package. The spending plan, which will rebuild roads and tunnels, improve schools, and upgrade the electric grid, is the President’s second major initiative since taking office in January.
To fund the plan, the White House would raise the corporate tax rate to 28%. That, combined with rules aimed at preventing companies from taking profits offshore, is expected to pay for the infrastructure plan over fifteen years. For context, the corporate tax rate was reduced to 21% from 35% in 2017.
The first part of this two-pronged economic plan does not include raising taxes on top earners’ individual income, estates or capital gains.
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How the $2 Trillion Will Be Spent
The White House’s infrastructure plan covers several areas that proponents argue have been neglected over the years. Of the $2 trillion, $621 billion is earmarked to improve bridges, tunnels, roads, airports, and public transit, as well as fund the development of electric cars, trucks, and buses.
The White House plans to spend $400 billion to care for America’s older adults and people with disabilities, as well as $300 billion to improve drinking water, increase broadband access, and upgrade electric grids.
The remaining $880 billion will be used to build and improve affordable housing and schools. Funds will also be invested in US-based manufacturing, research and development, and job training.
Spurring Economic Recovery and Shifts to Green Energy
Biden and his administration expect that infrastructure spending will help revitalize the US economy after it has been battered by the COVID-19 pandemic.
The administration also hopes the plan will help the country make a shift toward green energy sources. The White House expects it will have the support of some Republicans in Congress as it works to pass the bill. With that said, there will likely be heated discussions among lawmakers before an agreement is reached.
Yesterday’s announcement was just the first of a two-part economic plan that the President hopes to move through Congress. In April, Biden is expected to introduce a second plan focused on childcare, healthcare and education.
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