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On The Money: Breaking down Biden's infrastructure plan | Biden eyes tax hikes on corporations, households left alone

On The Money: Breaking down Biden's infrastructure plan | Biden eyes tax hikes on corporations, households left alone
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Happy Infrastructure Week and welcome back to On The Money.  I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—Biden makes case for infrastructure proposal: 'We have to move now' President BidenJoe BidenMilitary must better understand sexual assaults to combat them The Hill's Equilibrium — Presented by NextEra Energy — Tasmanian devil wipes out penguin population On The Money: Democrats make full-court press on expanded child tax credit | White House confident Congress will raise debt ceiling MORE on Wednesday made the case for his aggressive $2 trillion plan to modernize aging infrastructure and address climate change, saying it would boost America’s competitive edge on the world stage and create good-paying, middle-class jobs.

In a speech in Pittsburgh, Biden spoke with urgency about the need to pass his American Jobs Plan to overhaul a “distorted and unfair” economy and help the U.S. outcompete nations like China, framing the current moment as an opportunity to prove that democracies can deliver for their people. 

“We have to move now. Because I am convinced that if we act now, in 50 years people are going to look back and say, this was the moment that America won the future,” Biden said in an afternoon address at Carpenters Pittsburgh Training Center. 

The Hill’s Morgan Chalfant takes us to the Steel City here.

Breaking down Biden’s plan: Biden’s $2.25 trillion proposal aims to:

  • Repair 20,000 miles of roads and 10,000 bridges
  • Expand broadband access to rural and underserved communities
  • Replace all of the nation’s lead pipes and service lines to ensure clean water
    Invest in research and development and manufacturing
  • And expand access to home and community-based care. 

Biden’s plan also our billions into efforts to expand U.S. manufacturing, build affordable housing, make the nation resilient to climate change and improve workforce development. Morgan and Brett Samuels break it down here.

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How Biden pays for it:  Biden is avoiding tax hikes that could divide Democrats in his plan to pay for the $2 trillion infrastructure proposal, focusing on corporations and evasion instead of personal incomes. 

While Biden had been expected to well-to-do households with higher taxes, the president largely avoided hikes that risk drawing untenable political backlash as Democrats face a narrow margin for dissent.

  • Instead of adjusting personal income taxes, Biden proposed raising the corporate income tax rate to 28 percent from 21 percent, the level set by Trump's tax law. The corporate income tax rate was 35 percent before the 2017 tax cut, which was universally opposed by House and Senate Democrats.
  • Biden’s plan would also raise the minimum tax for multinational corporations with U.S. operations to 21 percent, make it harder for U.S. companies to use foreign headquarters to avoid federal taxes, enact a minimum 15 percent tax on reported income from large corporations, and eliminate various loopholes, subsidies and deductions that the White House says encourage offshoring jobs, keeping assets abroad, and support fossil fuel production.

I have more on Biden’s tax plan here.

The political hurdles: Democratic lawmakers largely praised Biden’s proposal, but the package was far less than what progressives wanted the president to introduce.

"This is not nearly enough," Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezHeatwaves don't lie: Telling the truth about climate change Biden risks break with progressives on infrastructure The Memo: The center strikes back MORE (D-N.Y.) said on Tuesday.

Biden’s plan also leaves out the repeal of the $10,000 cap on state and local tax deductions that several House Democrats insist must be in the bill for it to earn their support, which could be an issue for the president.

Democrats are expected to use budget reconciliation to pass the infrastructure plan, meaning they can only afford three defections in the House and none in the Senate if they don’t get bipartisan support. And that’s not looking likely.

A new GOP line: After warning that Biden’s $1.9 trillion rescue plan would overheat the economy and lead to rampant inflation, many GOP lawmakers are now arguing that the recovery is too fragile to withstand any tax increases. Making the case against Biden’s tax hikes, however, has required new GOP messaging on the state of the economy. I explain here.

What Senate Republicans are saying: 

Read more: 

LEADING THE DAY

Private sector jobs spike 517K in March: ADP: The private sector saw a significant boost in jobs in March, adding 517,000 new positions, according to payroll company ADP.

We saw marked improvement in March’s labor market data, reporting the strongest gain since September 2020,” said Nela Richardson, ADP’s chief economist.

The increase was the highest since September, when the private sector added 821,000 jobs before falling to more moderate levels through the autumn and winter, including a month of job loss in December. The Hill’s Niv Elis breaks it down here.

GOOD TO KNOW

ODDS AND ENDS

  • The retail trading app Robinhood announced on Wednesday that it would be removing its confetti feature amid criticism that it “gamified” stock-trading for users.
  • Ford Motor Co. on Wednesday announced cuts to production at six of its North America manufacturing plants as the automotive industry continues to be plagued by a global shortage in semiconductor chips.