Explained: Joe Biden’s $2.3 Trillion Plan To Reboot US Infrastructure That Will Be Funded By Increasing Corporate Tax To 28%

Close on the heels of $1.9 trillion fiscal stimulus plan to reboot the pandemic-ravaged US economy, President Joe Biden unveiled another plan that will plough $2.3 trillion into government spending on infrastructure.

Biden proposed to support the plan by raising the corporate tax rate from 21 per cent to 28 per cent to mop up $2 trillion to fund it. The President’s infrastructure plan will be spread over eight years,

Biden unveiled his massive infrastructure plan during a speech at a Pittsburgh on Wednesday (31 March). The plan includes $621 billion for transportation projects, $111 billion for water infrastructure and $100 billion for broadband.

The plan also envisages providing clean drinking water, a renewed electric grid, and high-speed internet to all Americans. The plan promises to bring affordable, reliable, high-speed broadband to every American, including the more than 35 percent of rural Americans who lack access to broadband at minimally acceptable speeds.

Touting the plan as an “once in a generation investment in America, unlike anything we’ve seen or done since we built the interstate highway system, and the space race decades ago”, Biden said that it will be the largest American jobs investment since World War II.

The White House provided a detailed plan of the infrastructure plan ahead of Biden's address.

"After decades of disinvestment, our roads, bridges, and water systems are crumbling. Our electric grid is vulnerable to catastrophic outages. Too many lack access to affordable, high-speed Internet and to quality housing. The past year has led to job losses and threatened economic security, eroding more than 30 years of progress in women’s labor force participation. It has unmasked the fragility of our caregiving infrastructure" the release said.

Under the infrastructure plan proposed by Biden,$621 billion will be earmarked on transportation-related spending including

• $115 billion earmarked to “modernize the bridges, highways, roads, and main streets that are in most critical need of repair,”;

• $20 billion to improve road safety for all users;

• $85 billion to boost existing public transit and help agencies expand their systems;

• $80 billion to support Amtrak and other rail projects;

• $174 billion to help the US electric-vehicles industry;

• $25 billion to aid airports;

• $20 billion for a new programme to reconnect neighborhoods cut off by past infrastructure projects;

• $17 billion to boost inland waterways, ports and ferries.

Under the plan, $213 billion will be provided to “build, preserve, and retrofit more than 2 million homes and commercial buildings to address the affordable housing crisis,”. Another $100 billion will be targeted for power infrastructure, $100 billion for workforce-development programmes and $100 billion to upgrade and build public schools.

The plan proposes $180 billion spending towards public investments in research and development to advance US leadership in critical areas such as computing and climate science, and $300 billion to “retool and revitalize American manufacturers and small businesses".

How The Plan Will Be Funded Through Corporate Tax Increase

Alongside his American Jobs Plan, President Biden also released a Tax Plan saying that corporations pay their fair share in taxes and encourage job creation at home.

The White House said proposed tax changes will “raise over $2 trillion over the next 15 years and more than pay for the mostly one-time investments in the American Jobs Plan and then reduce deficits on a permanent basis.”

The tax changes include raising the corporate tax rate to 28 per cent from 21 per cent, hiking the global minimum tax on US multinational companies, establishing what’s called a 15 per cent minimum tax on book income, eliminating tax preferences for fossil fuels and ramping up enforcement against corporations.