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Snippet of NPR's Up First: Biden's $2 Trillion Infrastructure Plan Explained

From Audio: Thursday, April 1, 2021

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station description NPR's Up First is the news you need to start your day. The three biggest stories of... read more
Up First
Duration: 03:49
President Biden plans to pay for his $2 trillion dollar infrastructure bill by raising taxes on corporations.
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President Biden plans to pay for his $2 trillion dollar infrastructure bill by raising taxes on corporations.
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president. Biden's plan to revamp the nation's aging infrastructure is ambitious. It is. It calls for spending on roads, bridges, drinking water, the electric grid, the Internet and a whole lot more. Biden talked in Pittsburgh yesterday, outlining what he's been calling the American Jobs plan. It's a once in a generation investment in America, unlike anything we've seen or done since we built the interstate highway system in the space race decades ago, and it is just part one. He is expected to call for trillions of dollars in additional spending on American families in the next few weeks. All right, so the big question now how to pay for it? For that, we turn to NPR chief economics correspondent Scott Horsley. Hi, Scott. Good morning, Rachel. Where's the money going to come from? Biden wants to send the bill for part one of his plan to corporate America in the shape of higher taxes on corporate profits. That's a big turnaround from what we saw in the last administration, which cut corporate taxes all the way from 35% down to 21%. Biden's plan would reverse about half that corporate tax cut move the corporate rate back to 28% and also make it harder for multinational corporations to avoid paying taxes by parking profits in other countries. The average multinational firm paid just 8% federal taxes the year after the GOP tax cut was passed. Another way to look at this Rachel corporate tax is paid at both the state and federal level now add up to about 1% of the U. S economy. Other big countries click two or three times that much from corporations. So even though corporations are going to keep some of the trump tax cuts, they're still not going to be happy about paying any higher taxes. I imagine what our business leaders saying, Yeah, you're hearing some Push back quickly to the Biden plan. Both the Chamber of Commerce and the Business Roundtable put out statements applauding the president for investing in infrastructure but saying that should be paid for by the people who use the roads in the pipelines and the power grid, not corporations. And you're likely to hear something similar from Republicans in Congress. Take a listen to how GOP Congresswoman Ann Wagner grilled the Treasury secretary, Janet Yellen, last week when Yellen just mentioned the possibility of higher taxes. We do need to raise revenues to support the spending that this economy needs to be competitive and productive. Secretary. We know that raising the corporate tax rate results in higher costs for small businesses, schools and American households. So it's possible Democrats will try to push this plan through on a straight party line basis, as they did with the $1.9 trillion rescue package last month. The next phase of the president's plan is likely to have even less Republican by in. The president wants to finance that part of his plan by raising taxes on wealthy individuals that is, people making more than $400,000 a year. Just last month, Congress agreed to borrow nearly $2 trillion for the pandemic relief package, Right. I mean, isn't this a tough bet, this new plan asking for so much additional spending on top of that? No question. It's a gamble, and the Democrats have reasons that are partly political and partly practical. Democrats have a limited window when they control the House, the Senate and the White House, so they want to act quickly while they have that opportunity. And then, on a practical level, the U. S is really behind in infrastructure investment. We're kind of like a homeowner who has put off fixing the roof and the crack in the driveway and the leak in the kitchen. And now they all need repair at the same time. S and P Global says state and local government spending on infrastructure has fallen by about $1.5 trillion over the last decade, compared the trend before the last recession. So, Rachel, that leaves a pretty big pothole that has to be filled before you can even start to talk, In Biden's phrase about building back better, NPR's Scott Horsley Thanks, Scott.
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