Eager to build infrastructure, expand corporate taxation plans | New York News
From Jonathan Lemire, KEVIN FREKING and ZEKE MILLER, Associated Press
PITTSBURGH (AP) – President Joe Biden wants $ 2 trillion to reshape American infrastructure and expects national corporations to pay for it.
The president landed in Pittsburgh on Wednesday to unveil a persistent transformation in the U.S. economy as big as the New Deal or Great Society programs that shaped the 20th century.
White House officials say spending over eight years would create millions of new jobs if the country turns away from fossil fuels and tackles the dangers of climate change. It is also an attempt to hold its own against the technology and public investment of China, which has the second largest economy in the world and is rapidly gaining dominant position as the United States.
White House spokeswoman Jen Psaki said it was about investing in America – not just modernizing our roads, railways or bridges, but also building infrastructure for the future.
Biden’s choice of Pittsburgh to unveil the plan had important economic and political resonance. Not only did he win Pittsburgh and the surrounding county to secure the presidency, but he started his campaign there in 2019. Famed for steel mills that fueled America’s industrial rise, the city has steadily focused on technology and healthcare, drawing college graduates in signs of how economies can change.
The Democratic president’s infrastructure projects would be funded through higher corporate taxes – a compromise that could spark stiff business opposition and thwart attempts to collaborate with Republican lawmakers. Biden hopes to be able to pass an infrastructure plan by the summer that could mean relying solely on the slim democratic majorities in the House of Representatives and the Senate.
The White House says most of the proposal includes $ 621 billion for roads, bridges, public transportation, electric vehicle charging stations, and other transportation infrastructure. The spending would drive the country away from internal combustion engines, which the auto industry sees as an increasingly obsolete technology.
Another $ 111 billion would be used to replace lead water pipes and modernize sewers. Broadband internet would cover the country for $ 100 billion. Regardless, $ 100 billion would upgrade the power grid to provide clean electricity. Homes would be retrofitted, schools modernized, workers trained and hospitals renovated as part of the plan, which also aims to strengthen US manufacturing.
The new building could keep the economy going and follow Biden’s $ 1.9 trillion coronavirus aid package. Economists already estimate that growth could exceed 6% this year.
Regardless, Biden will propose a series of soft infrastructure investments in childcare, family tax credits, and other domestic programs in the coming weeks, another roughly $ 2 trillion spending that according to trusted people through tax hikes for wealthy individuals and families should be paid with the proposal.
Funding the first $ 2 trillion for construction and “hard” infrastructure projects would be a corporate tax hike that would increase the amount required over 15 years and then reduce the future deficit, according to a White House plan. Biden would reverse a Trump administration’s signature policy by increasing the corporate tax rate from 21%, which was set in a 2017 revision, to 28%.
To discourage companies from shifting profits overseas to avoid taxes, a minimum global tax of 21% would be imposed. The tax code would also be updated to prevent companies from merging with a foreign company and avoiding taxes by relocating their headquarters to a tax haven. And, among other things, this would increase IRS audits on companies.
Democratic lawmakers approved Biden’s plan on Wednesday. Senate majority leader Chuck Schumer of New York said it would create millions of jobs.
“I look forward to working with President Biden to adopt a great, bold plan that will propel America forward for decades to come,” Schumer said at an event in Buffalo.
Rep. Peter DeFazio, chairman of the House Oversight and Transportation Committee, wants a highway and transit law passed by the committee in May. He called Biden’s plan “visionary and exactly what the people of this country have asked of national leaders for years, even decades.”
But key GOP and business leaders were already waving the package.
“It seems like President Biden has an insatiable appetite to spend more money and raise people’s taxes,” Louisiana GOP whip Steve Scalise said in an interview.
Republican Senate Chairman Mitch McConnell dismissed Biden’s package as nothing more than a “Trojan horse” for tax hikes.
“This is apparently not going to be an infrastructure package,” said McConnell, who also said Biden called him Tuesday about the plan. “It’s called infrastructure. But inside the Trojan horse there will be more borrowed money and massive tax hikes for all productive parts of our economy. “
The business community is in favor of upgrading US infrastructure but opposed to higher tax rates. Neil Bradley, executive vice president and chief policy officer of the US Chamber of Commerce, said in a statement: “We applaud the Biden administration for making infrastructure a top priority. However, we believe the proposal regarding paying for infrastructure is dangerously wrong. “The Business Roundtable, a group of CEOs, would rather finance the infrastructure with usage fees such as tolls.
In a statement, Trump blasted his successor’s proposal, claiming he would be “one of the greatest self-inflicted economic wounds in history”.
Pittsburgh is a series of steep hills and three intersecting rivers. The steel mills once covered the sky with so much soot that men had to bring spare white shirts to work because their buttons turned gray by lunch. It wasn’t until last year amid the coronavirus pandemic that the city met Environmental Protection Agency standards for air quality, even though it’s increasingly home to college or university technicians and healthcare workers.
Infrastructure spending usually promises to sap economic growth, but how much remains a subject of political debate. Commute and shipping times could be cut while public health improves and construction jobs support consumer spending.
Beth Ann Bovino, chief economist at Standard & Poor’s in the US, estimated last year that a $ 2.1 trillion increase in infrastructure spending in a decade would result in income of up to $ 5.7 trillion for the whole Economy could lead. This type of analysis has led Congress Liberal Democrats like Washington MP Pramila Jayapal to the conclusion on Tuesday: “The economic consensus is that infrastructure pays for itself over time.”
But the Biden administration is acting more cautiously than some Democrats would like. After $ 1.9 trillion in pandemic aid and $ 4 trillion in relief last year, the government is trying to avoid raising debt to levels that would trigger higher interest rates and make repayments difficult.
Psaki said Tuesday that Biden believes it is “the responsible thing” to pay for infrastructure through taxes rather than borrowing. The White House also spelled out the tax increases in its draft plan for the sake of fairness, stating that 91 Fortune 500 companies paid corporate taxes of $ 0 in 2018.
Biden’s efforts can also be hampered by demands from a handful of Democratic lawmakers who say they cannot support the bill unless it also addresses the $ 10,000 cap on state and local tax deductions for individuals under Trump and a Republican-led Congress.
With a slim majority in the house, they could potentially overturn any bill that does not substantially cancel or cancel the cap entirely.
“I can only vote for a bill that will have significant tax implications for my constituents if it addresses the SALT cap,” tweeted Rep. Tom Malinowski, DN.J.
“We say No SALT, no Deal,” said Democratic Representatives Tom Suozzi from New York and Bill Pascrell and Josh Gottheimer from New Jersey in a joint statement.
Miller and Freking reported from Washington. AP writers Lisa Mascaro, Josh Boak, and Padmananda Rama were from Washington
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