President Biden’s newly unveiled $ 2 trillion infrastructure plan is already facing a setback from economic observers who claim tax hikes on years of expensive projects could cost jobs.
“Increasing the corporate tax rate will inevitably have a negative impact on wages as much of the corporate tax rate will be passed on to workers to lower wages and layoffs,” David Tuerck, president of the Beacon Hill Institute, told the Herald.
The Biden government on Wednesday unveiled a $ 2 trillion American Jobs Plan aimed at rebuilding and improving the country’s crumbling infrastructure and billions of dollars for climate resilience, greener energy and broadband improvements all through one Pumping period of eight years.
Biden would pay it all by raising the corporate tax rate to 28% – former President Donald Trump lowered it from 35% during his tenure to 21% – and discouraging “offshoring” by introducing a global minimum tax of 21% and 15% introduced minimum tax on the income of large companies. It would take 15 years of higher taxes to pay for the projects.
The president said he was open to other funding proposals – as long as no one earning less than $ 400,000 sees taxes rise.
“This will create millions of jobs, create well-paying jobs, grow the economy, make us more competitive globally, advance our national security interests, and enable us to compete globally with China for years to come.” Said Biden when he revealed his plan in Pittsburgh.
But Trump slammed Biden’s plan as a “ridiculous” proposal that would do the opposite – send “thousands of factories, millions of jobs, and trillions of dollars” to nations like China.
“The Biden Plan will annihilate American workers and decimate US manufacturing, while giving outsourcers, overseas and giant multinationals special tax breaks,” Trump said in a statement on his 45 Office website, adding that he ” Among the largest self-businesses would “inflict economic wounds in history.” “
Garrett Watson, senior policy analyst at the Tax Foundation think tank, estimates that increasing the corporate tax rate to 28% would cut 159,000 jobs, cut GDP by nearly 1% and cut wages for workers “across the income scale”.
Watson also said this would “make the US uncompetitive with the rest of the industrialized world” and encourage companies to move investments overseas.
“Corporate tax increases hurt workers, and lawmakers must decide if this is the best move at a time when companies are trying to get more people back into the workforce,” said Watson.