Biden announced super-large 2,500 yen ‘infrastructure stimulus plan’ Financial resources come from tax hike

Check-in 2021.04.01 08:08

US President Joe Biden announced an infrastructure investment plan worth $ 2.55 trillion (about 254 trillion won). This equates to 10% of the U.S. gross domestic product (GDP).

President Biden visited Pittsburgh, Pennsylvania on the 31st of last month (local time) and said in a speech: “We are making the largest investment since World War II to create millions of high-quality jobs.”

Accordingly, the US government will invest $ 620 billion in improving the transportation sector, 650 billion dollars in drinking water and electrical grid improvement, 580 billion dollars in support of manufacturing and $ 400 billion in support of the elderly and disabled.

By 2030, it will also invest $ 170 billion in support of the electric vehicle industry, including the installation of 500,000 charging stations. Through this, the plan is to convert 50,000 diesel vehicles and at least 20% of school buses nationwide into electric vehicles.

The problem of obtaining financial resources is solved with tax increases. The corporate tax will be raised from 21% to 28% and the tax sources will be expanded for technology companies that establish commercial headquarters abroad in tax havens. It also stops tax breaks for fossil fuel companies.

President Biden stressed that the purpose of this tax increase is “to ensure more equitable earnings” and that “people who earn less than $ 400,000 a year will not be burdened with additional taxes.” At the same time, he proposed a plan to induce the world’s lowest corporate tax rate from 13% to 21% in order to equalize corporate tax between countries.

The key is whether the parliament passes. Reuters reported on the day that the Democratic Party responded that it was “ not enough ” and the Republican Party responded that it was “ excessive. ” Senate Representative Mitch McConnell of the Republican Party has already voiced his opposition, saying, “I do not support massive tax increases or increases in federal debt.”