On March 31, 2021 President Joe Biden released details on an infrastructure spending plan titled the “American Jobs Plan.” Among the administration’s goals, it aims to revamp 20,000 miles of roads and highways and repair 10,000 bridges. The proposal calls to build a national network of 500,000 electric vehicle chargers by 2030 and replace 50,000 diesel public transit vehicles.
Specifically, the plan would:
- Put $621 billion into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development;
- Direct $400 billion to care for elderly and disabled Americans;
- Inject more than $300 billion into improving drinking-water infrastructure, expanding broadband access and upgrading electric grids;
- Put more than $300 billion into building and retrofitting affordable housing, along with constructing and upgrading schools; and
- Invest $580 billion in American manufacturing, research and development and job training efforts.
The American Jobs Plan will cost around $2.3 Trillion over 8 years. To pay for this infrastructure plan, President Biden also unveiled the “Made in America Tax Plan.” The new tax plan would apply principally to multinational corporate taxpayers and plans to fully pay for the American Jobs plan in 15 years.
The Made in America Tax Plan would most notably change the tax structure for corporations, such as increasing the U.S. federal corporate income tax rate from its current level of 21% to 28% and increasing the multinational corporation tax rate to 21%. Additionally, the plan would eliminate a rule that allows U.S. companies to pay no taxes on the first 10% of returns when they locate investments in other countries. Meaning, U.S. multinational corporations will be taxed at a higher rate and make offshore investments by U.S. multinationals less attractive than under current law.
The new tax plan also would provide tax credits to investments in clean energy generation and storage, childcare facilities, and purchasing American-made electric vehicles.
Virtus Law, PLLC continues to monitor changes in this area and will continue to post relevant updates to this website.