Biden to announce up to $4 trillion infrastructure plan with massive tax hikes

Biden to announce up to $4 trillion infrastructure plan with massive tax hikesBiden to announce up to $4 trillion infrastructure plan with massive tax hikes.

President Biden will outline his massive $3 to 4 trillion infrastructure plan Wednesday, which will create four tax increases worth around $1.8 trillion, the White House revealed.

The commander-in-chief’s “Build Back Better” proposal, a centerpiece of his post-COVID campaign message, will be split into two packages for Congress to pass.

The first, the White House said, will focus on infrastructure investments specifically.

The second will focus on funding domestic policy areas of Democratic concern, such as providing universal pre-kindergarten and tuition-free community college, as well as health care.

Billions will also be put toward care for the elderly and disabled, as well as housing infrastructure and manufacturing.

As for how to pay for the plan, Biden’s main priority will be to raise the corporate rate from 21 percent to 28 percent.

In addition, Biden’s proposal would impose a global minimum tax on profits from foreign organizations, increasing capital gains taxes for the wealthy, and returning to the Bush-era individual rate of 39.6 percent for those making over $400,000.

“The president has a plan to fix the infrastructure of our country,” White House press secretary Jen Psaki told reporters, “And he has a plan to pay for it.”

Psaki was asked for more details on the proposal at Tuesday’s briefing, specifically whether the plan included “shovel-ready projects that could get underway” immediately or focused on longer-term efforts.

“The speech tomorrow is about making an investment in America, not just modernizing our roads or railways or bridges, but building an infrastructure of the future,” the White House press secretary began.

“So some of it is certainly infrastructure-shovel-ready projects, some of it is how do we expand broadband access, some of it is ensuring that we are addressing the needs in people’s homes and communities,” she continued, adding that Biden had “a range of components” he planned to address in his speech.

Asked about raising individual tax rates, Psaki replied that the president “thinks it’s the responsible thing to do to propose a way to pay for that over time, and he also believes that there’s more that can be done to make the corporate tax code fair.”

“He believes that there’s more that can be done,” she continued, “to reward work not wealth, to ensure that we can invest in the future industries that are going to help all people in this country.”

The plan is almost certain to have no Republican support at first, given the price tag and their party-wide opposition to Biden’s $1.9 trillion COVID-19 relief bill.

While infrastructure, unlike much of COVID-19, has not been politicized, the spending proposals are so enormous they are unlikely to receive a warm welcome from Republicans in Congress.

Infrastructure spending, however, is largely accepted as much needed for the sake of crumbling roads and bridges nationwide, as well as the jobs it’d create for the US economy.

Democrats will likely use earmarks — provisions that allow lawmakers to pad legislation with funds for their specific pet projects — to entice Republicans to support the effort.

House and Senate Democrats initially voted to bring back earmarks earlier this year, and Republicans followed shortly after, largely concluding that they should make sure their priorities get funded as well, despite concerns about the methods.


Discussing concerns about how to pay for such mammoth legislation, Psaki said Tuesday that the administration was “very open to hearing ideas and proposals from members of Congress, Democrats or Republicans.”

Psaki was then asked if the president would sign a bill that did not pay “dollar-for-dollar” for the proposals being put forward.

“There will be a range of views including how to pay for it, people will be for or against, some people may not want to pay for it,” she replied, “He is open to having those discussions.”

Biden pledged during his campaign that anyone making under $400,000 would not see a tax increase, something he reiterated after his election.

As reports began to circulate that the president was preparing to introduce his infrastructure proposal earlier this month, Biden was asked what the American people should expect in terms of their taxes.

Anyone making over $400,000 will see “a small to significant” tax increase, he replied, speaking to ABC’s “Good Morning America.”

A bridge that has rust issues in New York
The commander-in-chief’s “Build Back Better” proposal, a centerpiece of his post-COVID campaign message, will be split into two packages for Congress to pass.
Getty Images
“Yes, anybody making more than $400,000 will see a small to a significant tax increase,” Biden said, adding a promise that “If you make less than $400,000, you won’t see one single penny in additional federal tax.”

Asked if he could get Republican votes for a tax increase, the president did not sound optimistic, but said that wouldn’t derail his effort.

“I may not get it, but I’ll get the Democratic votes for a tax increase. If we just took the tax rate back to what it was when [George W.] Bush was president — [when] the top rate paid 39.6 percent in federal taxes — that would raise $230 billion. Yet they’re complaining because I’m providing a tax credit for child care for the poor, from middle class?”

Psaki said during Tuesday’s briefing that the $400,000 mark would apply to individual filers as well as families.

Doing so, however, could create problems for individuals who make less than $400,000, but who are filing jointly with a spouse.

Timothy McGrath, a tax expert with Riverpoint Wealth Management, told Fox Business Tuesday, “It’s a significant disadvantage to married couples. It’s another marriage penalty, and this is nothing new in the tax system.”

Two individuals each earning $200,000 could get pushed to the top bracket as a household making $400,000, forcing them to pay the top rate of 39.6 percent as opposed to if they filed separately.


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Republicans are almost certain to oppose these tax increases without a clear way to pay for them, as Senate Minority Leader Mitch McConnell (R-Ky.) warned earlier this month.

“I don’t think there’s going to be any enthusiasm on our side for a tax increase,” the top ranking Senate Republican said, predicting that Democrats’ infrastructure effort would be a “Trojan horse” for other Democratic priorities.

In interviews with Axios, a group of House Democrats voiced their own concerns over the astonishing price tags the administration was suggesting.

“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,” Rep. Josh Gottheimer (D-NJ) told the outlet.

“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.”

“I’m not voting for any changes in the tax code unless we reinstate SALT as part of the deal,” Rep. Tom Suozzi (D-NY) said, referencing the State and Local Tax deduction capped under then-President Trump.

Rep. Scott Peters (D-Calif.), meanwhile, said he disagrees with Biden’s push for a 28 percent corporate tax rate, instead backing 25 percent.

“Republicans overshot” the mark when they, under Trump in 2017, cut the top corporate tax rate from 35 percent to 21 percent, Peters argued.

“I think that 25 percent is fine. It doesn’t disadvantage our companies, and in turn our employees, workers.”

On the left flank, Sen. Ed Markey (D-Mass.) and Rep. Debbie Dingell (D-Mich.) unveiled a far grander infrastructure proposal on Monday calling for $10 trillion in spending over the next decade.

Experts on that side of the aisle are warning that Biden’s $3 trillion would be insufficient.

Robert Pollin, an economist at the University of Massachusetts who helped craft the two Democrats’ proposal, told the Washington Post in an interview that Biden’s investment amounts to a mere 1.3 percent of the US’ gross domestic product.

“That was itself skirting on the edge of being inadequate relative to the climate goals and infrastructure goals,” Pollin told the paper.

Howard Gleckman, a tax expert at the nonpartisan Tax Policy Center, told the paper that while there is “pretty broad bipartisan support” for a big infrastructure plan, “There is not bipartisan support for paying for it.”


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