President Biden will unveil an eight-year, $2 trillion infrastructure plan that will be paid for with higher corporate income taxes.
Two construction equipment groups offered initial support for the plan, although concerns about tax increases came from the manufacturing side.
What Biden's infrastructure plan includes
The Associated Equipment Distributors (AED) praised Biden's plan, which it said would include:
- $621 billion for transportation, including roads, bridges, transit, ports and airports as well as electrifying vehicles.
- $111 billion to upgrade drinking and wastewater infrastructure.
- $100 billion for high-speed broadband infrastructure.
- $100 billion to upgrade the U.S. power infrastructure.
- $213 billion to “produce, preserve, and retrofit affordable and sustainable places to live."
- $137 billion for physical upgrades to public schools, community colleges, child-care facilities, VA hospitals and federal buildings.
- $300 billion to invest in U.S. manufacturing and strengthen critical supply chains.
- $100 billion for workforce development and jobs training programs.
- $400 billion for “expanding access to quality, affordable home- or community-based care for aging relatives and people with disabilities.”
“AED commends President Biden for proposing a bold plan to rebuild the nation’s physical infrastructure, including investments in roads, bridges, highways, broadband, ports, water systems and other projects,” said AED President/CEO Brian P. McGuire in a prepared statement. “The legislative process in Congress must proceed expeditiously and in a bipartisan manner. AED looks forward to working with the Biden-Harris administration and lawmakers from both sides of the aisle to enact much-needed infrastructure investments and to identify responsible ways to pay for the proposal without sacrificing America’s productivity and international competitiveness.”
The Association of Equipment Manufacturers (AEM) also supported the plan.
“We support President Biden’s vision for how to build a new and stronger economy that creates opportunity for all Americans,” said Kip Eideberg, SVP of government and industry relations, in a prepared statement. “We stand ready to work with President Biden to help him make the bold, transformational investment in workforce development, infrastructure, and American manufacturing that is long overdue.
According to AED, Biden will rely on a variety of tax changes targeted to corporations, including increasing the corporate rate to 28 percent, creating a 15 percent minimum tax on the income corporations use to report their profits to investors (book income), eliminating tax preferences for the fossil fuel industry, greater tax liability on U.S. multinational corporations, and more robust IRS tax enforcement.
Can taxes support Biden's infrastructure plan?
AEM called for caution on tax increases.
“[W]e strongly urge [President Biden] to make sure that we preserve the predictability and stability in the tax code that keeps equipment manufacturers competitive and drives job creation and good wages. Tax reform made equipment manufacturers more competitive in the global economy. It is imperative that we do not undo that progress.”
Doug Carlson, CEO of the National Utility Contractors Association, also expressed concern on the tax implications.
“President Biden’s infrastructure plan has some very good elements in it, such as the $111 billion to increase spending on improving our nation’s water infrastructure systems,” Carlson said in a statement. “However, our industry joins the American business community in being wary about how the President is going to pay for all of this with corporate tax increases on the very companies that create new jobs. Congress has its work cut out on reconciling this plan with economic and fiscal realities.”
“The best thing that can be said about the plan is that the Administration and Congress, and both parties, are at least talking about infrastructure. Our deteriorating water and wastewater systems, crumbling highways, and insufficient broadband capacity can’t be ignored forever.”