President Biden recently unveiled a more than two trillion-dollar infrastructure package. The plan would be paid for in part by raising the corporate tax rate. We talked about the infrastructure proposal and the plan to pay for it with Jenny Brown of ASU’s W.P. Carey School of Business.
Host Ted Simons asked what jumps out to Brown about this massive plan and she responded by saying, “the Biden administration is proposing a very large by any scale, it has not been done before in terms of what it wants to do. It has, as people have been talking about, traditional infrastructure stuff in it; highways, bridges, things that think about civil engineers working on that have been ignored and maybe not taken care of for a while. That part of the bill has some pretty broad bipartisan support, but then other things like there are some other questions about whether that is infrastructure or not.”
As the conversation shifted to the taxes that are supposed to pay for this plan Brown said it should be thought of in context as a reaction to the tax cuts of 2017.
She elaborated, “Prior to 2017 we had a corporate tax rate a statutory rate of 35% that was pretty high relative to the rest of the G-20 and then in December of 2017 we had a large, significant slash in the corporate tax rate from 35% down to 21%. So we’ve been living in this 21% world and now we are having this proposal to go from that 21% up to 28%, so somewhere back to the middle. The proposal, as you said, this is the corporate tax piece of Biden’s campaign, we saw a mix of corporate tax proposals and individual tax proposals in the campaign and in this proposal we’re seeing a corporate pay for.”