Eager to build infrastructure, Biden plans to tax business

President Joe Biden wants $2 trillion to reengineer America’s infrastructure and expects the nation’s corporations to pay for it.

The president landed in Pittsburgh on Wednesday to unveil what would be a hard-hatted transformation of the U.S. economy as grand in scale as the New Deal or Great Society programs in the 20th century.

White House officials say the spending over eight years would generate millions of new jobs as the country shifts away from fossil fuels and combats the perils of climate change. It is also an effort to compete against the technology and public investments made by China, which has the world’s second-largest economy and is fast gaining on the United States’ dominant position.

White House press secretary Jen Psaki said the plan is “about making an investment in America — not just modernizing our roads or railways or bridges but building an infrastructure of the future.”

Biden’s choice of Pittsburgh for unveiling the plan carried important economic and political resonance. He not only won Pittsburgh and its surrounding county to help secure the presidency, but he launched his campaign there in 2019. The city famed for steel mills that powered America’s industrial rise has steadily pivoted toward technology and health care, drawing in college graduates in a sign of how economies can change.

Relying on Democrats

The Democratic president’s infrastructure projects would be financed by higher corporate taxes, a trade-off that could lead to fierce resistance from the business community and thwart attempts to work with Republicans lawmakers. Biden hopes to pass an infrastructure plan by summer, which could mean relying solely on the slim Democratic majorities in the House and the Senate. The White House says: • The largest chunk of the proposal includes $621 billion for roads, bridges, public transit, electric-vehicle charging stations and other transportation infrastructure. The spending would push the country away from internalcombustion engines that the auto industry views as an increasingly antiquated technology.

• $111 billion would go to replace lead water pipes and upgrade sewers.

• Broadband internet would blanket the country for $100 billion.

• $100 billion would upgrade the power grid to deliver clean electricity. Homes would get retrofitted, schools modernized, workers trained and hospitals renovated under the plan, which also seeks to strengthen U.S. manufacturing.

The new construction could keep the economy running hot, coming on the heels of Biden’s $1.9 trillion coronavirus relief package. Economists already estimate it could push growth above 6% this year.

More to come

Separately, Biden will propose in the coming weeks a series of soft infrastructure investments in child care, family tax credits and other domestic programs, another expenditure of roughly $2 trillion to be paid for by tax hikes on wealthy individuals and families, according to people familiar with the proposal.

Funding the first $2 trillion for construction and “hard” infrastructure projects would be a hike on corporate taxes that would raise the necessary sum over 15 years, then reduce the deficit going forward, according to the White House outline of the plan. Biden would undo a signature policy achievement of the Trump administration by lifting the corporate tax rate to 28% from the 21% rate set in the 2017 overhaul.

To keep companies from shifting profits overseas to avoid taxation, a 21% global minimum tax would be imposed. The tax code would also be updated so that companies could not merge with a foreign business and avoid taxes by moving their headquarters to a tax haven. And among other provisions, it would increase IRS audits of corporations.

Democratic lawmakers embraced 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 pass a big, bold plan that will drive 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 to have a highway and transit bill passed out of the committee in May. He called Biden’s plan “visionary and exactly what people across this country have been asking for from national leaders for years, even decades.”

GOP critical

But key GOP and business leaders were already panning the package.

“It seems like President Biden has an insatiable appetite to spend more money and raise people’s taxes,” Rep. Steve Scalise of Louisiana, the GOP whip, said in an interview.

Senate Republican leader Mitch McConnell dismissed Biden’s package as nothing more than a “Trojan horse” for tax hikes.

“This is not going to be apparently an infrastructure package,” said McConnell, who also said Biden called him about the plan on Tuesday. “It’s called infrastructure. But inside the Trojan horse there’s going to be more borrowed money and massive tax increases on all the productive parts of our economy.”