Joe Biden has come up with a $2 trillion American Jobs plan that is compelling Congress to make some significant changes in not only the traditionally-held view of Infrastructure but also on the variety of other areas including housing, workforce, broadband, etc. The price for all of this will be paid by American taxpayers with more than $2 trillion in the form of tax hikes over the period of 15 years.
The American Jobs plan is presented as profitable that will improve the living condition of the American people and will increase taxes only on billionaires and multinational corporations. While presenting these arguments the Democrats completely fail to consider the fact that the tax hike will be borne by workers and consumers of these corporations.
Many budget experts believe that Biden’s plan to spend the $2 trillion in 8 years and pay for it in 15 years is not the way things are done in Washington. The tax hikes will eventually make America a less competitive country as compared to its peers with no guarantee that the Biden government will be able to compel developed countries of Asia and Europe to increase their corporate tax. This minimization of competition will hit not only businesses but also workers and investors.
Biden administration has proposed to double the tax on global profit of US-based multinational companies from 10.5 percent to 21 percent. Trump Administration’s global intangible low-taxed income (GILIT) was proposed was included in the 2017 tax law. The aim of including this reform was to prevent the subsidiaries of US-based companies from shifting their profits to low-tax countries. This increase in the GILIT will also make the US market less competitive as most foreign countries do not subject a company to pay the same tax on foreign as it pays on domestic earning. This decrease in the competition will affect working conditions as well as the quality of products.
President Biden has also hinted at an annual audit of large US Corporations under the new plan. Such a large-scale audit will increase the tax burden on the American taxpayers as it requires every organization to increase human and financial resources to comply with the audit of IRS paperwork and correspondence. Additionally, experts have also highlighted several loopholes in the audit process that need to be addressed before moving forward with such large-scale audits.
Biden administration will also spend $174 billion on the electric vehicles market to boost the domestic use of these materials and spur development in this area. Nevertheless, this is not how free markets work. Extending a heavy hand of government should not dictate the free market. Additionally, this step will only benefit wealthy consumers and will not affect the low-income or middle-class Americans for whom the plan is presented.
Moving forward, the plan only allocates a small portion to the traditional infrastructure such as roads, bridges, and tunnels. The infrastructure that carries a significant place in the economy is largely ignored by Biden as only $115 billion is allocated to it. The actual cost that should be spent on roads, bridges, and tunnels in their repaid and development does not even come near $115 billion. Biden Administration and Democrats are hailing this plan as the reformer that will reform the American economy struck with the pandemic. However, they are ignoring the loopholes present in this plan along with the fact that the price of this adventure will eventually be paid from the pockets of ordinary American citizens who are already suffering due to the pandemic.