On the heels of the recently enacted $1.9 trillion COVID relief package, President Joe Biden was in Pittsburgh last week to unveil a sweeping infrastructure and jobs proposal. The ‘American Jobs Plan’ calls for a $2 trillion investment over the course of eight years that would be funded by corporate tax increases.
In order to pay for what the president has called a “once in a generation investment,” the administration has proposed a slew of corporate tax increases. Most notably, the plan would undo one of the significant features of the 2019 federal tax reform law by increasing the corporate tax rate from the current 21 percent to 28 percent. Other tax components include increasing the global minimum tax from about 13 percent to 21 percent and increasing IRS audits of corporations.
A significant component of the wide-ranging plan focuses on improving the country’s infrastructure, with $621 billion dedicated to roads, bridges, rail and electric vehicles. The proposal also includes policies that would impact domestic energy generation in an effort to address climate change, including $400 billion in clean energy tax credits. The measure calls for $400 billion for research and development – with an emphasis on clean energy and reducing emissions; $580 billion for affordable housing and expanding broadband access; and $650 billion towards what the President deemed the “care economy,” with funds going to home and community-based services for seniors and those with disabilities and to improve benefits for caregivers.
In a statement following President Biden’s announcement, U.S. Chamber Executive Vice President and Chief Policy Officer Neil Bradley applauded the administration for making infrastructure a top priority, but cautioned against raising corporate taxes to pay for it.
“We need a big and bold program to modernize our nation’s crumbling infrastructure and we applaud the Biden administration for making infrastructure a top priority,” Bradley stated. “However, we believe the proposal is dangerously misguided when it comes to how to pay for infrastructure. Properly done, a major investment in infrastructure today is an investment in the future, and like a new home, should be paid for over time – say 30 years — by the users who benefit from the investment. We strongly oppose the general tax increases proposed by the administration which will slow the economic recovery and make the U.S. less competitive globally – the exact opposite of the goals of the infrastructure plan.”
He went on to encourage Republicans and Democrats to work together to find a bipartisan solution to funding the nation’s infrastructure needs.
In an interview with StateImpact Pennsylvania, PA Chamber President Gene Barr echoed the U.S. Chamber in urging federal lawmakers against increasing corporate taxes and also expressed concern with the plan’s reliance on renewable energy. “I think I would be very cautious about being unduly prescriptive in terms of the kinds of energy that you’re going to use,” he said. “Trust the people who are in the energy sector to make the best decisions. They’ve got a vested interest in complying with consumer demand and trying to reduce CO2 emissions, too.”