Biden’s unnecessary infrastructure binge
Today in Pittsburgh, Joe Biden has announced plans to spend more than $ 2 trillion on infrastructure and oversized grab bags for housing, manufacturing, elderly care and other priorities, including PRO law. This makes it difficult for workers to make choices. Stay away from the union. Another package, which could reportedly push the total price tag to $ 4 trillion, is still in the works. Of course, this follows the $ 1.9 trillion bill he has already signed. There are three main things to keep in mind when considering whether Republicans and moderate Democrats can support this, and when discussing the details. Biden’s proposal is very expensive. Our infrastructure has not “collapsed” due to a shortage of federal dollars. Biden’s payment plans are income that may damage the economy, harm middle-class Americans that Biden has vowed to protect, and use nothing else to correct existing deficits. Includes a tax increase that eats up the source. $ 2 trillion is a lot of money, to say the least. It is $ 6,000 per person in the country. That’s almost half of what the entire federal government spent in 2019 before the coronavirus rampage. And don’t forget, this is not the first or last big budget Biden spending plan of the year. With the addition of the COVID bill and the next spending bill, we can discuss $ 6 trillion, or $ 18,000 for all men, women and children. This is more than normal spending and is not strictly limited. On the other hand, proponents of huge infrastructure spending argue that it is necessary because the infrastructure is “collapsed”. But no matter what civil engineering groups say, this is not true. Our infrastructure is generally fine, as explained in a 2019 survey by three economists and an essay on national issues in 2020 by Eli Lehrer. For example, the physical condition of interstate highways has actually improved in recent decades, but buses are on average younger and the quality of bridges is stable. And the United States looks great in an international situation because of its superbly short commute times (despite increased congestion) and fast broadband. In addition, most of America’s true infrastructure problems are best dealt with at the state and local levels, rather than subsidizing the federal government for politically favorable projects. It does not mean that there is no room for improvement and that there is no parliamentary role. Spending on this large infrastructure means that it does not meet urgent needs in a targeted way. After a year of non-stop COVID bailouts, 13-digit spending projects shouldn’t be taken too lightly. If the president wants to do something about infrastructure, he focuses on streamlining the regulatory process, which makes it very expensive and time-consuming to build American infrastructure, and spends money on budget waste. Instead, you need to carefully select areas where you can use more money to put together a new federal project. Then there is the issue of all these payment methods. Since the campaign, Biden has helped the wealthy to significantly raise corporate and income taxes. These policies could hinder growth, harm middle-class taxpayers that Biden promised not to touch, and make deficit reform even more painful in the future. Eight years of infrastructure bill spending will be covered by a 15-year corporate tax hike. This not only raises the tax on corporate income from 21% to 28%, but also imposes various other tax systems. We have strengthened the “Global Minimum Tax” to a minimum tax on the “book” income of large corporations (for example, it does not include investment deductions or previous losses). Meanwhile, details of the personal income tax hike await Biden’s next proposal. Perhaps all these tax increases will not be able to fully pay the spending, especially if part of the agenda is renewed at the end. But still they will have a big tax increase. If all other conditions are the same, it is in fact undisputed that a tax hike will slow economic growth. For example, the Congressional Budget Office recently discovered that both labor and capital taxes reduce GDP. The former is by reducing incentives for labor and the latter by reducing incentives for savings and investment. On the other hand, the evidence that infrastructure investment is spurring growth enough to make up for it is controversial at best. These taxes can also have a direct impact on Americans who have promised Biden to be protected. During the campaign, Biden vowed not to raise taxes on “anyone” with incomes of less than $ 400,000. However, that promise has now magically evolved to include households that exceed the threshold only when the incomes of both spouses are counted. Of course, during the speech he insisted dishonestly. “No one who earns less than $ 400,000 will see their federal tax go up. Limited.” And corporate taxes will put a fairly wide burden on Americans. These are nominally borne by the company itself, but in reality they are borne by the composition of shareholders, employees and customers. This includes middle-class savers and workers throughout the income range. Economists disagree exactly on how the burden is distributed, but even the left-wing tax policy center believes that higher corporate taxes will lower the income of low- and middle-income households. Trillions of dollars in tax increases will be bad news in the best of circumstances. They’re even worse news if they’re used to fund entirely new federal spending, not to reduce deficits. These new taxes, for example, cannot stop the disaster that is approaching our qualification trust fund. Also, future tax increases will have a major impact on the middle class. Biden’s speech was littered with compliments on the importance of the union and highly misleading claims about the decline of the United States. In fact, the president claimed that the fate of the country was at stake in his bill. “If we act now, in 15 years, people will look back, I’m sure this was the moment America won the future,” he predicted. Sorry, the President, the United States, cannot win the future with another tax increase, government boondog, or union bailouts.