The United States Government has proposed a new ten-year plan to create jobs and infrastructure of two trillion dollars (1.7 trillion euros) with the aim of “revitalizing” jobs in the manufacturing sector and compete more directly with China, as announced by the White House on Wednesday.
The presidency of Joe Biden has ensured that the hefty cost of this investment plan will be paid for over the next 15 years thanks to a series of tax increases to the company and the elimination of tax exemptions and rebates. If the plan is approved in its entirety, new revenue past those first 15 years will “continuously” reduce budget deficits.
The star measure of the new US Government is to raise the Corporation Tax from the current 21% to 28%. The increase would mean recovering part of the decrease approved by the previous US president, Donald Trump, when since 2018 he lowered this tax. Since 1993, the corporate tax had been 35%.
If Donald Trump’s cut is not taken into account, a tax rate of 28% would still be the lowest figure for this figure since 1940, when it was 24%. In 1968, the largest corporate tax rate in the history of the United States was established. The president at the time, Lyndon B. Johnson, approved a five percentage point hike to fund the Vietnam War and its package of social programs known as the ‘Great Society’.
In addition, this plan will also eliminate tax incentives for investment returns abroad. Tax deductions will also be eliminated in the repatriation of profits from the United States to companies located in countries that have not entered into the global agreement on a minimum effective rate of corporate tax.
Among the investments that the Biden Administration plans to undertake are the repair of highways, bridges, ports and airports, the improvement of electricity, water distribution and high-speed broadband networks, or the modernization of schools, nurseries and buildings. federal.
Part of the plan also focuses on encouraging the creation of jobs in the United States by forcing companies that apply for public contracts to have a greater percentage of the products and services produced take place in the country.