Roughly one month after President Biden approved a USD 1.9 Trillion COVID-19 relief package, the White House has unveiled its proposal for a massive USD 2 Trillion infrastructure spending bill. The Biden Administration plans on investing hundreds of billions of dollars into transportation, schools, buildings, roads, and technological innovation. Other things on the White House’s shortlist of investments include improving water quality, boosting internet speeds, and building thousands of charging stations for electric vehicles. It’s estimated that the bill could create 2.7 million jobs in the coming decade. While there certainly are positives about the proposed bill, there are also negative consequences to spending this amount of money in such a short amount of time.
For instance, inflation is an important factor to consider. The only ways to reduce inflation are either cutting spending in certain areas or raising taxes on American citizens and businesses. Also included in the bill is a plan to raise the corporate tax rate from 28%, which is estimated to accumulate the USD 2 Trillion needed for the bill over a period of 15 years. Additionally, certain state and local tax deductions would be repealed under the bill which will effectively raise taxes on high-income individuals. It already seems that there will not be bipartisan support for the bill as usual, as some Republicans have already slammed the bill as a “non-starter” due to the tax hikes proposed. The previous spending bill however was passed without Republican support, as Democrats control all 3 branches of government. Speaker of the House Nancy Pelosi has stated that Congress hopes to pass the infrastructure bill by July 4th.
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