May 31, 2021
24
 MIN

Infrastructure: How Do We Pay for It? Will It Even Work?

Show Notes

Sweeping infrastructure plans are in plans across the globe. Take Biden's nearly $4 trillion infrastructure package that is aimed at repairing roads, transportation hubs and telecommunication systems. How do they plan on paying for it?

Taxes!

  • To finance the proposal, the administration has proposed a partial rollback of some tax breaks signed into law in 2017 by President Donald Trump, pushing tax rates on corporations from 21 percent to 28 percent, and raising rates on individual incomes over $400,000 and capital gains for the next 15 years.
  • Corporate tax hike: Biden would raise the corporate income tax rate to 28%, up from 21%. The rate had been as high as 35% before former President Donald Trump and congressional Republicans cut taxes in 2017.
  • Global minimum tax: A historic proposal would increase the minimum tax on US corporations to 21% and calculate it on a country-by-country basis to deter companies from sheltering profits in international tax havens.

The reforms will affect the largest companies in the world with profit margins of at least 10%. But will it work?

Yes! The bill is heavily focused on the pressing issue facing the world: climate change. If signed into law, the plan would rank as one of the largest federal efforts ever to curb emissions & reduce the economic cost of climate change through this bill.

Studies reveal that infrastructure spending does lead to output and productivity growth. Analyses by the Federal Reserve Bank of San Francisco determined that post-war road-building was both a good investment and a boon to growth.

Transcript