Biden wants to boost $ 3 trillion in new bills or be paid by wealthy companies and individuals_Sina.com

Biden wants to boost $ 3 trillion in new bills or get paid by wealthy companies and individuals

Author: elegant

The United States, which is distributing a $ 1.9 trillion economic stimulus package, still has the money to introduce the next bill?

According to information released by the US media, Biden’s new bill can reach US $ 3 trillion and consists of two parts: one focuses on infrastructure construction, including investment in 5G, green power grids, universal access. to Broadband Internet, Semiconductor Production, and Carbon- Free Transportation: The second part includes universal preschool education, free community colleges, child tax credits, and subsidies for low- and middle-income families to participate in health insurance.

But where did the $ 3 trillion in funding for this bill come from? According to US media citing information from two people familiar with the situation, White House officials are discussing tax increases on wealthy Americans, companies, and investors in order to raise funds for trillion-dollar infrastructure and programs. Biden’s employment.

Zhou Shijian, a senior fellow at the Tsinghua University Center for Sino-American Studies, told a China Business News reporter: “It is the tradition of the Democratic Party to increase taxes. The Republican Party (the practice) is to reduce taxes.” and expand the deficit and the national debt, while the Democratic Party will reduce the deficit and the national debt. Tax increases in severe periods will make the economy worse, but the concept of the Democratic Party will sooner or later be reflected. In my opinion, the tax increases by the Biden administration are more natural and normal. “

Who is Biden’s tax increase plan for?

As mentioned above, the new stimulus bill will be divided into two parts, one will focus on infrastructure and clean energy, and the other will be household priorities like childcare and preschool, which the Biden administration calls “taking care of the economy.” The proposed tax increase measures to protect the plan are also expected to split into two parts accordingly.

According to relevant officials, the infrastructure part of the legislation is expected to be financed primarily through corporate taxes. The main measures under discussion include raising the corporate tax rate from 21% to 28% and raising the world’s lowest corporate tax rate from approximately 13% to 21%. In addition, it will end federal subsidies to fossil fuel companies and force multinational companies to pay the US tax rate instead of the lower tax rate of their foreign subsidiaries.

The national priority portion is expected to be financed by taxing the wealthy and investors. Officials said related measures include raising the top income tax rate from 37% to 39.6%, substantially raising taxes for wealthy investors and restricting the number of deductions wealthy taxpayers can apply each year. Biden also plans to tax income from capital income (such as stocks and dividends) as normal income for people who earn more than $ 1 million. Currently, the top tax rate on capital gains is slightly above 20%, which is well below the top tax rate of nearly 40% that Biden is seeking.

Biden said his tax increase will not affect people with an annual income of less than $ 400,000. White House Press Secretary Jen Psaki earlier stated at a press conference, “ Biden’s priority and focus has always been to get people to pay taxes fairly, paying attention to businesses that can not paying taxes fairly. It’s still his general strategy, but there’s no package yet. “Asked if Biden would consider taxing the wealth of the rich, Psaki said that Biden’s view is that” the middle class pays more taxes than they should. to be. And those at the top have not fulfilled their responsibilities. “

Tax collection will be an important source of funding

Zhou Shijian told a China Business News reporter: “The United States is a market economy country. 99% of companies are private companies. Therefore, 99% of the country’s income is taxed. The cuts (The Trump administration’s) tax revenue has resulted in tax revenue. To increase the deficit, the solution is to issue treasury bonds and eat more food. Simply put, Trump is using his great-grandson’s money to stimulate the economy in order to achieve reelection. “

According to data from the Bureau of Economic Analysis (BEA), as of March 2021, the scale of US Treasuries has exceeded 28 trillion US dollars, and its gross domestic product (GDP) in 2020 will be US $ 20.93 trillion, and the cumulative debt scale equals 133.8% GDP. The U.S. Congressional Budget Office (CBO) predicts that, combined with the direct impact of the $ 1.9 trillion stimulus plan, the total deficit in 2021 will reach $ 3.4 trillion, greater than last year’s record of $ 3.1 trillion, and the deficit in 2022 will increase. reach $ 1.6 trillion.

“In 1991, 12 countries of the European Community presented two financial warning lines in Maastricht. The first is that the countries participating in the euro zone must have a budget deficit of no more than 3% of the GDP of the previous year. The second is that the scale of the accumulated national debt cannot exceed 60% of GDP in the previous year. These two standards were later accepted by financial and economic circles around the world. ” Zhou Shijian analyzed: “The situation in the United States is that fiscal year 2017 The fiscal deficit represented 3.5% of GDP. In fiscal year 2018 it represented 3.9% of GDP. In fiscal year 2019 it represented 4.6 % of GDP. In fiscal year 2020 it represented 15.2% of GDP. GDP, the highest record since World War II. It was once in a century in 2008. During the financial crisis, the fiscal deficit of 1.41 trillion US dollars in fiscal year 2009 represented 9.9% of GDP. “

Zhou Shijian said: “Trump’s tax cuts (launched in 2017) have been eager for quick success and quick profits. Although they have stimulated the stock market, they have left a bad legacy for America … Now America has accumulated national debt as a percentage of GDP (133.8%). The financial warning line stipulated by the Stricht Treaty has doubled. Now that Biden is here, he will definitely have to raise taxes in the next three years. Otherwise Where will the government get the money? “

According to an independent analysis by the US Tax Policy Center on Biden’s campaign tax plan, the plan will raise $ 2.1 trillion in ten years.

All Republicans opposed

Liu Yongtao, a professor at the Fudan University Institute of International Studies, said in an interview with a China Business News reporter: “The two parties in the United States have the same position on the issue of infrastructure construction. Republicans also recognize that the United States needs to implement infrastructure construction and revitalize the country. Manufacture. This is also the rare place where Congress and the two parties can reach a consensus, which can also solve the problem of domestic employment in the United States. “

But whether this infrastructure-building plan can win Republican support will largely depend on whether the bill will raise taxes to raise funds. Republicans say that at a time when the US economy is fragile, the Democratic president’s tax plan will hurt businesses. According to information released by the US media, the tax increase bill will largely reverse part of former President Trump’s steep cut in corporate taxes in 2017.

“There is no valid reason for tax increases like the one they advocate,” said Senator Toumi, who helped formulate the 2017 Republican tax legislation. “I disagree that we should pass a huge and economically disruptive tax increase so the government can spend extra money again. “

Zhou Shijian explained, “The internal economic struggle between Republicans and Democrats has always revolved around tax increases and cuts. Trump originally wanted to push through the 2.0 tax cut plan late last year and early last year. Taxes The cuts for people with an annual income of more than $ 136,000 are used to stimulate the economy. But the problem is that the House of Representatives controlled by the Democratic Party rejected this plan because the philosophy of the Democratic Party is to increase taxes and reduce deficits. Besides, the United States now has a huge one. The social problem in China is the disparity between rich and poor, and poverty reduction is an important concept of the Democratic Party, which is what we usually say, the Democratic Party he likes to steal from the rich and help the poor. “

Although large business groups and some Congressional Republicans have previously expressed support for Biden’s infrastructure projects, business groups have warned that corporate tax increases will wipe out their support for the infrastructure plans. “This is something that will undermine national competitiveness,” said Aric Newhouse, senior vice president for policy and government relations for the National Association of Manufacturers (NAM) last month.

Editor in Charge: Qi Qiqi