Biden plans to fund these investments in large part through tax increases. The plan proposes raising the corporate tax rate to 28% from the current 21%, effectively repealing the changes to the corporate tax made under the Trump administration’s sweeping tax cuts in 2017.
Republicans have been quick to pounce, criticizing the plan as a stand-in for the Green New Deal, arguing the tax increases will kill jobs, and complaining that a majority of the funds allocated within the bill don’t go to infrastructure.
Here’s a look at the facts.
Facts First: While a respected tax policy think tank offers a basis for Crapo’s claim that the plan will result in some job losses, other experts predict it will also create new jobs. It remains to be seen whether it will result in a net gain or a net loss of jobs in the long run.
While estimates could change depending on the average effective corporate tax rate — which measures what corporations actually pay in taxes after taking out items like deductibles and credits — Garrett Watson, one of the authors of the Tax Foundation’s report, told CNN “the Biden tax plan would likely put our average effective tax rate above average in the OECD as it was in 2017” prior to the Trump administration’s tax cuts.
Watson said the Foundation stands by its estimates but clarified that the effects of the other tax provisions are as of yet unclear.
Though it’s possible the plan’s proposed corporate tax increase in isolation might result in some job losses, the plan as a whole is aimed at spurring job creation, especially in the transportation sector.
A day after Biden’s announcement, an email from the Republican National Committee claimed “Joe Biden’s ‘infrastructure’ plan is not really about infrastructure, it is another multi-trillion dollar far left wish list,” echoing similar complaints made about the Covid-19 relief package, the American Rescue Plan.
According to the GOP, “Only 7% of the bill’s spending is for what Americans traditionally think of as infrastructure.”
Facts First: The GOP claim that just 7 percent of the bill’s spending applies to infrastructure is misleading. That being said, the debate over what technically counts as infrastructure is a real one, and much of the bill’s spending falls outside even the broadest of definitions.
The Republicans could have fairly argued that a majority of the funds aren’t going directly to infrastructure projects but the 7% number relies on a the GOP’s own narrow definition of infrastructure.
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