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On Wednesday in Pittsburgh, President Biden unveiled the contents of his infrastructure plan, dubbed the “American Jobs Plan,” which is expected to allocate between $2 trillion and $3 trillion for its implementation. In addition, he has a second spending plan aimed at improving what he calls the country’s “human infrastructure,” which would involve a new education budget program.
Biden’s American Jobs Plan seeks to overhaul America’s airport, road, and bridge infrastructure. It also seeks to promote the adoption of a low-carbon energy matrix, invest in the care of the elderly and the disabled, and finally, boost research and development in key sectors for the U.S. economy, such as semiconductor manufacturing. Its cost will be financed by a generalized increase in taxes on both corporations and individuals.
What is Biden’s ‘American Jobs Plan’?
La gran inversión del plan de infraestructura totalizará los $2,25 billones que serán divididos en 4 segmentos. Cerca de $620,000 millones estarán destinados a invertir en la renovación de carreteras, el mantenimiento de puentes estratégicos, y la restauración del sistema de transporte público, así como el establecimiento de una red de 500,000 estaciones para cargar los autos eléctricos.
The infrastructure plan’s large investment will total $2.25 trillion and will be divided into 4 segments. Nearly $620 billion will be earmarked for investment in highway renewal, maintenance of strategic bridges, and restoration of the public transportation system, as well as the establishment of a network of 500,000 electric car charging stations.
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The second segment will allocate $650 billion in investment in broadband for rural communities, potable water, electric grid and public housing. Part of the Biden plan’s aqueduct renovation will be to replace 100 percent of lead pipes and eliminate lead exposure in 400,000 schools and educational institutions.
A third segment will allocate $400 billion to care for the elderly and people with disabilities by hiring health care workers to care for them.
Finally, the plan will allocate close to $580 billion for research and development. One of the objectives of this fourth segment is to boost semiconductor manufacturing in the country and reduce dependence on imports from China.
Should the plan be approved by Congress, according to the White House itself, government spending will return to the levels of the 1960s, when President Lyndon B. Johnson established the Economic Opportunity Act of 1964.
Biden’s plan still has to face stiff opposition from the Republican Party and convince several skeptics in his own party before it becomes a reality. In that sense, some moderate Democratic Party senators such as Joe Manchin have reservations about the increase in fiscal spending and the size of the government relative to tax revenues, while the public debt is growing at an accelerated rate.
How will the infrastructure plan be financed?
It comes on the heels of one of the largest expansions of the federal government in history, with more than $5 trillion earmarked to combat the pandemic emergency. In that regard, Biden plans to increase several taxes, including the corporate tax rate from 21% to 28%, as well as a 21% foreign income tax on U.S.-based companies, and to push for the implementation of a global corporate minimum tax.
Companies are not the only ones that will face a tax increase. Individuals with incomes over $400,000 will see an increase in income tax from 37% to 39.6%.
As if that were not enough, Biden is also considering a new tax on automobile travel on the nation’s highways, as mentioned by Transportation Secretary Pete Buttigieg:
The intention would be to compensate for the drop in gasoline tax revenues, following the growing increase in the purchase of electric cars.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica