Could You Be Impacted?
On March 31, the Biden administration announced their proposal for a $2.2 trillion infrastructure bill called the American Jobs Plan. According to the official fact sheet, the American Jobs Plan aims to “create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.” (1)
“create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.”
This historic bill offers an expansive sweep of some of America’s most impactful infrastructure systems including transportation, manufacturing, community resources and more. Below we’re outlining some of the major components of this proposed bill and how your taxes could be affected.
The American Jobs Plan Overview
While this is not a comprehensive list, here are some major components of the American Jobs Plan.
Transportation Infrastructure
The proposed legislation would offer $621 billion in important upgrades and repairs to roadways, ports, transit systems, bridges and airports.
For example, infrastructure slated to receive upgrades include: (1)
20,000 miles of highway and roads
10 major bridges with economic significance
10,000 minor bridges that link communities together
Thousands of buses and rail cars
Community Infrastructure
As a part of this legislation, the Biden administration aims to “deliver clean drinking water, a renewed electric grid and high-speed broadband to all Americans.” (1)
“deliver clean drinking water, a renewed electric grid and high-speed broadband to all Americans.”
As a part of restoring and improving communities through their infrastructure, this bill would aim to:
Remove all lead pipes & service lines in drinking water systems
Create 100,000+ jobs in laying transmission lines & capping orphaned oil and gas wells or abandoned mines
Build, preserve or retrofit 2 million+ homes and commercial buildings
Upgrade veterans’ hospitals
Workforce & Manufacturing Infrastructure
The proposed legislation aims to secure U.S. supply chains while revitalizing the manufacturing industry at home. As a part of the American Jobs Plan, this bill puts a focus on upgrading the country’s research infrastructure and training a new generation of American workers for future technologies.
This bill includes: (1)
$50 billion invested in the National Science Foundation (NSF)
$30 billion for research and development, with a focus on job creation in rural areas
$40 billion in upgrading research facilities
$35 billion towards addressing the climate crisis and developing clean energy
$30 billion in jobs and research focused on preventing future pandemics
Caregivers
The American Jobs Plan puts a focus on home care workers, especially in light of COVID-19. This portion of the plan promises to create new, more desirable job opportunities for caregiving workers. It’s the administration’s goal to offer home- and community-based care for those who need it, but would otherwise have to wait years to receive it.
Will Your Taxes Be Raised?
With a major legislative proposal, the question arises: who will be paying for these changes? The American Jobs Plan is expected to be funded primarily through corporate taxes, with an expectation that the eight-year plan would pay for itself in 15 years. (1)
Corporate Taxes
The Biden administration has started to outline possible tax changes, including: (1)
Raising corporate taxes from 21 percent to 28 percent
Cracking down on companies that use overseas operations to manage profits
Eliminating tax breaks for some industries
Individual Taxes
Currently, there is no proposal by the Biden administration to place new taxes on individuals. There have been several discussions, however, that could potentially change this.
One proposal that may get introduced, for example, suggests raising taxes on families with an annual income of $400,000 or more. Others have proposed a higher capital gains tax rate for individuals earning $1 million a year or more, as well as adjustments to the estate tax exemption. (2)
At this point, it's uncertain what - if any - tax changes for individuals will be taken up by Congress. The initiatives that will take priority may become more clear in the weeks ahead.
Challenge yourself to be patient during this period of debate over tax proposals. It can be nerve-wracking to hear your taxes may be on the rise, but it’s too early in the process to know what changes may actually occur. If you’re concerned about the American Jobs Plan and its potential impact on you or your business, reach out to us to discuss your concerns.
https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/
https://www.bloomberg.com/news/articles/2021-03-15/biden-eyes-first-major-tax-hike-since-1993-in-next-economic-plan