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The American Jobs Plan Has Been Announced. Could You Be Impacted?


Contributed by WHVP
April 19, 2021



On March 31, the Biden administration announced their proposal for a USD 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

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 USD 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

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 and capping orphaned oil and gas wells or abandoned mines
  • Build, preserve or retrofit 2 million+ homes and commercial buildings
  • Upgrade veterans' hospitals

Workforce and 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

  • USD 50 billion invested in the National Science Foundation (NSF)
  • USD 30 billion for research and development, with a focus on job creation in rural areas
  • USD 40 billion in upgrading research facilities
  • USD 35 billion towards addressing the climate crisis and developing clean energy
  • USD 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 USD 400,000 or more. Others have proposed a higher capital gains tax rate for individuals earning USD 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 want to stay up to date on WHVP's blog posts and market outlooks, make sure to sign up for WHVP's newsletter.


1. https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/

2. https://www.bloomberg.com/news/articles/2021-03-15/biden-eyes-first-major-tax-hike-since-1993-in-next-economic-plan

 

Tags: business | economics | unemployment | fiscal policy | tax | United States

 

 

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